THE GOLDEN STATE NOW THE RUSTY IRON STATE

Years of unbridled spending by the state has left nearly one out of every four Californians in poverty

The days of living high on the hog may be over for many Californians. And according to the Associated Press, the Democrats, who’ve been responsible for past spending binges, have now gained a supermajority in the California Legislature for the first time since the 19th century. Democrats reached the critical two-thirds majority threshold in both houses that gives them complete dominance of state politics and the ability to raise taxes unilaterally if they choose. Look for higher taxes and more spending binges.

CALIFORNIA’S POVERTY RATE HIGHEST IN U.S. BY NEW FEDERAL MEASURE
by Dan Walters

The Sacramento Bee
November 14, 2012

Nearly nine million Californians - almost a quarter of the state's residents - live in poverty under a newly devised federal standard, making the state's rate by far the highest in the nation.

The stunning number will fuel California's perpetual political debate over the state's "safety net" of health and welfare services, which have been reduced sharply due to budget deficits. With voter approval of new taxes, advocates for the poor are demanding that some of the benefit cuts be rescinded.

California's 23.5 percent poverty rate under the "supplemental poverty measure" (SPM) developed by the Census Bureau is approached only by the 23.2 percent rate in the District of Columbia. The highest SPM rate in any other state is Florida's 19.5 percent.

The state-by-state comparison is found in a Census Bureau report on the SPM, which is being tested as a replacement for the current way of measuring poverty, which is a half-century old.

The new, and still experimental, system includes broader data of income and outgo that have emerged since the system was created in the early 1960s, such as payroll taxes that reduce disposable income and government benefits that increase income.The new system also takes into account cost-of-living variations from state to state.

The steep climb in California's poverty rate under SPM, adding nearly 3 million to the poverty rolls, is apparently driven largely by the state's high cost of living.

Under the old - and still official - system, California's poverty rate is 16.3 percent, which translates into slightly over 6 million of the state's 38 million residents. That rate is somewhat higher than the national rate of 15 percent, but by no means the highest in the nation.

The national SPM rate is 15.8 percent, a fractional increase from the official rate, and California's SPM rate of 23.5 percent represents not only the highest in the nation, but the largest of any state's jump from the official rate to the SPM rate. In some states, the SPM rate actually is lower than the official rate.