California and Obamacare

California has gone thru this slog before with No Child left Behind, a ten year costly nightmare of adjustment. Here is how it goes with Obamacare:

The cost of private medical insurance has spiked. That means a new proposition on the ballot to regulate medical insurance. But we do not know the results until November, so hiring remains mostly part time until that gets sorted.

We know that public health expenditures will go up by 6 billion, at least, within two years; mainly because of the expanded services required under the law.  That means a year of shifting around the medical industry, concentrating public hospitals.  We also need to find another 4% in additional state spending authority in the budget, but if we borrow our debt costs jump another point.  So we have a tax battle coming up.  But a tax battle also means dealing with DC to avoid the double taxation issue, and that adds a year of slowdown.

Then there is the medical industry which has no idea how all the costs partition out, so little growth in private medical practices for two years, if ever. Then comes the medical public sector unions who will need to get involved to protect their stake, resulting in additional distortions and delays.

Meanwhile we have a continuing and never ending backlog of new Medicaid enrollees because full time hiring is down to a trickle. Then there is the issue of undocumented California residents, how are they dealt with? They still constitute the majority of the 30% underground economy in California and that sector will accelerate, further depleting the state of taxes. It is a self reinforcing cycle.

No Child Left Behind was a nightmare in California, and it still has left plenty of unanswered issues, mainly increased hiring and pension costs.  Those issues will be left to fester.
 
The university professors will add nothing but useless partisan white wash to the whole issue, until their budget starts getting cut.  Then they become experts on the utility of higher professor pay rates.

Additional manufacturing will leave the state as the slowdown in business threatens to leave them behind.