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California breakup plan would create rich and poor states: report

By Sharon Bernstein

SACRAMENTO Calif. (Reuters) - A long-shot proposal to break California into six separate states would also divide rich and poor, according to a legislative analysis released on Wednesday.

The plan, which supporters hope to put before voters as a ballot initiative this November, is backed by Silicon Valley billionaire Tim Draper, who submitted 1.3 million signatures in favor of his proposal to Secretary of State Debra Bowen last month.

"At least initially - and perhaps for many decades after their creation - the six proposed new states would have widely varying income levels," said the report by Legislative Analyst Mac Taylor.

The wealthiest of the proposed new states would be "Silicon Valley," comprised of the affluent, pricey tech hub near San Jose, along with San Francisco.

That state would have a per capita income of $63,288, twice that of the poorest region and a third higher than California's current per capita income of $46,477. A state of Silicon Valley would bring in $2,168 per person annually in income taxes, the report showed.

The poorest of the new states, to be carved out of the agricultural Central Valley, would have a per capita income of $35,510 and bring in $472 in income taxes per resident. Jefferson, to be carved out of the northernmost California region near the Oregon border and named after the third U.S. president, would have per capita income of $36,147, and garner income tax of $463 per person per year.

West California, which includes Los Angeles, would fall in the middle, with a per capita income of $44,900 and annual per capita income tax of $1,116.

Draper, who has funded the campaign, says his plan would create a more business-friendly environment, solve the state’s water issues and ease traffic congestion.

But the idea has raised bipartisan hackles across California, and opponents say it stands little chance of gaining voter approval. Even if it does, it must still be passed by Congress, which opponents say is also unlikely.

(Editing by Jonathan Oatis)

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