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California, once a dream state, strives to get back its groove

As it has slid, the state's citizens have begun to focus on its core dysfunctions.

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It's never done particularly well on the one that rates tax favorability for businesses, but now it comes up 48th for fiscal year 2009, according to the Tax Foundation. Next-door neighbors Nevada and Oregon are among the best 10 in terms of business tax climate, which is an incentive for businesses to locate or relocate nearby. As for taxes on individuals, the state has the highest sales tax in the nation, and its income-tax rate ranks toward the top, too.

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Moreover, a California Faculty Association report last month warned that the state "is on course to wreck its own economy" because of failure to invest in higher education, and a US Chamber of Commerce "State-by-State Report Card on Educational Effectiveness" gives California an F on academic achievement.

In December, California had the fourth-highest jobless rate of states in the US, at 9.3 percent, according to the US Bureau of Labor Statistics.

California Forward wants to establish a network of regional, private-public partnerships to pursue long-term recovery from the current economic challenges.

One example is prisons, says Mayer. A panel of three federal judges found Feb. 9 that overcrowding in state prisons has deprived inmates of their right to adequate healthcare and ruled that the state must reduce its prison population. California's 33 prisons were designed for 84,000 inmates but now hold 158,000.

"Our state's prison budget has been growing faster than any other outlay for a decade, not because of the prison system itself, but because of costs," says Mayer. In 2001, California spent $26,556 per inmate, ranking 23rd in the nation. By 2005, costs per inmate had increased to $34,150, sixth in the nation. By contrast, 31 states reduced costs.

The Bay Area Council, in its bid to hold a constitutional convention, hopes to limit ideas to four categories: budget reform, election reform, more local control of locally collected funds, and the establishment of an oversight commission to examine and make recommendations on the function and viability of every state agency.

"It's modeled on the very popular Texas system," says Grubb. "They will investigate every state agency and make suggestions on whether or not it should be continued, disbanded, or merged in some other form with another agency. We feel this is a great way to get better efficiency out of government."

Although some sociologists and writers predict continued decline for Californians' quality of life, historian Kevin Starr, who has writen seven volumes about the state, has described California as an open-ended experiment in "global ecumenical civilization." "The state is increasingly difficult ... and aware of enormous challenges that are forcing its citizens and institutions to struggle mightily," he said in a 2004 interview with the Monitor. "The typical American dreamer can no longer merely say, as he once did, 'The solution is that I have come to California.' The ante has been upped."