By. Orange County Register Editorial Board
One in five Californians live in poverty, according to a new U.S. Census Bureau report.
Using the Supplemental Poverty Measure, which accounts for regional cost-of-living, the average poverty rate in California from 2014 through 2016 stood at 20.4 percent, the highest among the states and second only to the District of Columbia’s 21 percent average. The national average over that period of time was 14.7 percent.
Despite boasting one of the largest economies in the world, California has consistently topped national rankings of poverty. While the state only accounts for about 12 percent of the national population, for example, Californians comprise one-third of Temporary Assistance for Needy Families beneficiaries.
One of the largest factors driving California’s shamefully high poverty rates is the high cost of housing.
According to a draft report on the housing crisis by the California Department of Housing and Community Development, “production averaged less than 80,000 new homes annually over the last 10 years, and ongoing production continues to fall far below the projected need of 180,000 additional homes annually.”
As a result, homeownership rates are at the lowest they’ve been since the 1940s, as increasing proportions of renters find themselves rent-burdened. According to the California Budget & Policy Center, more than half of renter households pay more than 30 percent of their incomes for housing, and one-third pay more than half of their incomes for housing.
This situation, which also contributes to California’s unfortunate distinction of being home to approximately 22 percent of the nation’s homeless population, has imposed significant hardships on millions of people across the state, and exacerbated California’s high poverty rate.
State legislators have thus far focused primarily on advancing proposals to spend more taxpayer funds on housing. Instead, we encourage state lawmakers to focus their efforts on better streamlining housing construction, with a focus on removing unnecessary barriers thrown up by the California Environmental Quality Act, which, among other things, is all too often used as a tool by NIMBYs to block developments.
Aside from housing, it can’t be ignored that, in addition to having one of the largest economies in the world, California also happens to have some of the highest tax rates in the country, and some of the least business-friendly policies on top of that.
In a recent WalletHub report on overall tax burdens, California ranked 10th-worst in the country. Meanwhile, the Tax Foundation ranked California 48th in its 2017 State Business Tax Climate Index due to California’s distinction of having some of the highest income, sales and corporate tax rates in the nation.
Unsurprisingly, California is perennially ranked as one of the worst states in the country in terms of perceived business friendliness. This year, the state again ranked dead last — as it has for the past 13 years — in a survey of hundreds of CEOs by Chief Executive magazine on measures of business friendliness, with the state ranked the worst in the taxation and regulation category.
Taken together, California’s barriers to business will, in turn, harm the poor the most. If California wants to seriously address its high levels of poverty and factors aggravating it, like high housing costs, it must relinquish its commitment to excessive taxation and regulation.