Richard's Real Estate and Urban Economics Blog: State growth and ...

Paul Krugman rightly calls out Arthur Laffer's junk economics on the impact of state and local taxes on economic growth (I have no idea about why anyone listens to Laffer about anything, but that is for another day). ?At the same time, however, a good, liberal friend of mine told ?me yesterday that for the first time in his life, he will vote against a tax increase in California--the temporary tax increase proposed by Jerry Brown that will be on the ballot on November 6.

My friend has no issue with government spending per se; his problem is that he gets to observe the doings in Sacramento quite closely, and as he puts it, "it is even worse than you think up there."

California's state and local governments spend a lot of money. ?We ranked 4th in 2010 among the 50 states in per capita state and local spending. ? ? Yet if one looks at education spending, we are only average. ?Even worse (from the standpoint of my parochial pride, anyway), we trail Texas in education spending per capita.

My understanding is that once upon a time, California had among the most efficient and accountable governments in the country. ?The public schools were a particular source of pride. ?But the vast amounts of money are not being well managed now--such mismanagement is harmful whether it occurs in the public or private sector. ?How well government money is spent may be just as important as how much money is spent.

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