California Split Into Six Separate States
The California breakup countdown begins. Nineteen and a half weeks. 807,615 signatures. That is the time frame and magic number needed to place Initiative #13-0063 on the November 2014 ballot.
For those who may not be familiar with its formal name, the “Six Californias” Initiative is a combined initiated constitutional amendment and state statute that would divide California into six new states. Sponsored by Silicon Valley venture capitalist Tim Draper, the initiative – first announced in December 2013 – was initially viewed as an unrealistic publicity stunt. However, it has continued to garner support, and the California Secretary of State’s office recently gave approval to start collecting the required signatures.
Photo Credit: sixcalifornias.info
In addition to the creation of the proposed new states of Jefferson, North California, Silicon Valley, Central California, West California, and South California, the initiative would 1) proportionately distribute California’s debts based on population, 2) end all tax collections and spending by the existing State of California, and 3) create new, more representative governments that would determine and set changes with respect to taxes, spending, and other public policies for their new state. Considering California’s total debt as of September 2013 was $132 billion, and the top marginal income tax rate went from 10.3 percent to 13.3 percent (highest in the nation) last year, this proposal might actually allow for regional economic recovery.
The counties that would comprise these new, individual states all share relatively common characteristics, including cultures, socio-economic backgrounds, legislative needs, and political affiliation. Thus, residents living in Los Angeles County wouldn’t be paired with Napa and other Northern California counties to create a new state, due to the significant contrast in the aforementioned characteristics. This would give each state’s elected officials greater knowledge of exactly what their constituents want and need from their representatives and local government.
For those thinking the counties encompassing the bankrupt cities of Stockton and Bakersfield would spiral economically out of control, our data proves the exact opposite. Based on Internal Revenue Source data contained within How Money Walks, the counties that would make up the proposed state of Central California actually experienced a net gain in adjusted gross income (AGI) and population: $1.36 billion and 49,021 taxpayers. In fact, only two of the six proposed new states experienced net losses of AGI and population: West California (-$34.54 billion and -909,029 taxpayers) and Silicon Valley (-$26.89 billion and -300,878). It should come as no surprise, then, that the proposed state with the greatest net loss of AGI and population would be the new home of Los Angeles County. What is surprising is the net-loss figures of the proposed state of Silicon Valley, even though economists project it to be the wealthiest state in the union if this initiative comes to pass.
Whether the “Six Californias” Initiative will gain voter approval remains to be seen, but the fact that residents of the Golden State are willing to break up the state to change the current economic and political trajectory is the big take-away. As it stands, we at How Money Walks project California to lose $9.74 billion in annual AGI from 2010 to 2014. With $4,782 leaving the state every minute of every day for the past 18 years, California’s economic policies simply aren’t working for its current and former residents. Could this proposal provide the change the West Coast has long needed? We’ll know soon enough.