Sid Dinerstein
Tuesday, Oct. 7, 2003

Since January 2001, California has lost over 300,000 manufacturing jobs alone, according to the U.S. Department of Commerce, Bureau of Labor Statistics. And while Florida lost fewer than 20,000 manufacturing jobs over a similar period, Gov. Jeb Bush was able to boast in his Labor Day speech: "Florida has led the nation in job growth for 16 straight months, and the list of companies relocating to the Sunshine State continues to grow."

From 1995-2000, 2.2 million Californians left their state, while nearly 1.5 million new folks arrived. Florida, the U.S. Census Bureau tells us, received a net inflow of more than 600,000 residents during that 1995-2000 period, fully half (308,000) from New York state alone.

What are the reasons for this disparity of fortunes between two of our most populous states?

The Cato Institute has done the math, an annual "Fiscal Policy Report Card on America's Governors." It measures the performance of governors based on 17 policy variables that look at economic growth, control of spending and proposed or enacted taxes.

California has a Democratic governor and a Democrat-controlled legislature. Cato's report grades Gov. Gray Davis as one of only four Fs for "one of the worst financial performances of any governor in any state in a very long time." With no crabby Republicans in power to Just Say No, the feeding frenzy is on. Worker's compensation reform is off the table, paid annual leave is the law and the automobile tax is about to triple.

In his five years in office, the California budget grew from $74 billion to $110 billion. He inherited a $10 billion budget surplus; now the state faces a $38 billion deficit – the largest ocean of red ink in the history of the states. The state payroll swelled by 25,000 employees during just his first three years in office, a larger increase than the next three biggest states combined. The bond rating service Moody's has downgraded California bond ratings twice.

Florida has a Republican governor and both houses of the legislature have Republican majorities. With no tax-and-spend Democrats in power to Just Say Yes, fiscal responsibility is in vogue.

Cato gave Gov. Jeb Bush one of just two As and stated that he "is the real tax-cutting fiscal conservative in the family. Property taxes were cut by $1 billion, the business intangible tax by $600 million and he took the unusual step of walking the halls of the Capitol himself asking members of both parties to oppose a sales tax hike sponsored by members of his own party."

An analysis by the American Legislative Exchange Council of state tax policy during the past decade found that the 10 states that cut taxes the most created twice as many new jobs as the 10 states that raised their taxes the most. Ironically, states that cut taxes enjoyed much better economic growth and subsequently collected more taxes. It should be noted that virtually all states enjoyed huge gross tax revenue increases in the past 10 years, but the crunch came as a result of even higher rates of spending.

As Gov. Bill Owen, Republican governor of Colorado and Cato's other A achiever, put it: "States do not have a revenue problem. They have an overspending problem."

The title of this article comes from the Charles Dickens classic, A Tale of Two Cities. That novel begins with the immortal words: "It was the best of times. It was the worst of times." And so it is. It just depends on where you live.

Sid Dinerstein is the chairman of the Republican Party of Palm Beach County.

Copyright (c) 2003, South Florida Sun-Sentinel

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