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Break California into six states? A fine idea, but...

A venture capital investor's answer to an out-of-touch government is to break up California into six states. It's a "solution" that could have horrific consequences.

March 02, 2014|Michael Hiltzik
  • Molly Kelley of Klamath River holds up a State of Jefferson flag, which dates to a 1941 effort.
Molly Kelley of Klamath River holds up a State of Jefferson flag, which dates… (Francine Orr, Los Angeles…)

There are two broad categories of government reformer. One is the type who tries addressing government inequities where and as they occur — a housing crisis here, a water crisis there, racial discrimination here, there and everywhere. Then there's the type who advocates throwing out the old system wholesale and starting from scratch.

Timothy C. Draper, 55, a successful venture capital investor with a lengthy record of public involvement to his name, plainly has thrown in his lot with the latter group. His new idea, an initiative to break up California into six states, has just been cleared for signature collection, with an outside chance of making it onto the statewide ballot as soon as November. To be sure, there are some virtues in Draper's idea, though they wouldn't come from going through with it.

Draper's initiative glosses over so many complexities (just for starters, the six-state realignment would have to be approved by Congress) that the first question he often gets asked by interviewers is whether he's actually serious. Let's just say that he sure sounds sincere.

"Sacramento's a monolith," he told me. "We're out of touch with it. By creating six states, we have the ability to become closer to our government."

Yet the dream of government realignment as a solution to government ineffectiveness is an old one, and almost never works. Europe's current experimental rearranging of national authority has created as many new problems as it's solved, and its outcome is uncertain.

Travel around Africa and you'll hear many experts argue that solving its economic problems requires breaking up its big countries into smaller ones, and just as many argue that the answer is to merge its small nations into big ones.

Political scientists' solutions for bureaucratic inefficiencies, too, oscillate between calling for decentralized administration (when everything is run out of the capital) and centralized management (after decentralization fails).

What that suggests is that tampering with established structures isn't the answer. In the case of California, the consequences of the breakup Draper advocates could be horrific.

For one thing, breaking up California means severing the economic ties that give the state's economy diversity to protect it from the swings and roundabouts of economic cycles — having an economy that incorporates agriculture, high tech, manufacturing, entertainment, international trade and scientific research isn't a drawback but an advantage, since those sectors don't always rise and fall in sync.

Draper's roots in Silicon Valley inevitably raise the suspicion that his goal is to preserve the economic advantages of his home region by sloughing off the burden imposed on its residents by other, less vibrant, parts of the state. His proposed state of Silicon Valley would incorporate everything from San Francisco to Monterey, Santa Cruz and the East Bay.

He says that's not so, but as the nonpartisan Legislative Analyst's Office observes, not only would Silicon Valley be the richest new state, but the Central Valley state of Central California — Fresno, Merced, etc. — would instantly become the poorest state in the nation, with an annual per capita income $150 less than that of Mississippi.

Draper dismisses that finding. "All six will be among the richest states in the country," he declares, "though that might be 10 years down the road." The key, he says, is that their citizens will be so close to their governments that "some sacred cows will go away and special interests might fade into the distance. They're going to be created in modern terms."

Indeed, he maintains that the most support for his idea isn't coming from the richest parts of the state but the poorest, places like the Central Valley and the far north, a region his initiative calls Jefferson.

"The people way up there in Jefferson feel very distant from where their tax dollars are going and where their laws are coming from," he says.

But he's not doing those people any favors by glossing over the truth about their economic situation. Jefferson, which would include Humboldt, Modoc, Siskiyou, Mendocino and 10 other mostly rural counties, would be the second-poorest state of the six.

According to the legislative analyst, those counties are charged the lowest per capita state income tax and have the smallest sales tax base and the lowest property valuation. They spend the most on K-12 education of any of the would-be states per pupil (more even than Silicon Valley); two-thirds of that money comes from Sacramento.

For someone with an unassailable record of business success, Draper can come off as a bit starry-eyed. That's especially so when he suggests that social or political issues can be solved more easily by individual states dealing with each other, like parties in a business dispute, than by leaders working within a single state.

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