Splitting California into six states would be complicated and time-consuming but not impossible, according to a state analysis.
Tim Draper, the multimillionaire Silicon Valley venture capitalist behind the proposal, said he was encouraged by the California legislative analyst’s report, declaring that dividing the nation’s largest state is “clearly legal and doable.”
“It is obvious that we need a breath of fresh air in California government, and creating six new states allows the refresh we need,” Mr. Draper said in an email after the study was made public over the weekend. “California, as it is, is ungovernable. We need our state governments to be local to us.”
The legislative analyst’s report on the proposed Six Californias amendment shows two of the states becoming richer and four becoming poorer. The smallest and poorest would be the northernmost state of Jefferson.
That doesn’t bother Mark Baird, a spokesman for the Jefferson Declaration Committee, who said the short-term economic hit would be far preferable to the state’s slide into a morass of ever-greater debt, taxes and regulation.
“We aren’t worried about the economy at all,” said Mr. Baird. “The way we figure it, we would create a state with a favorable regulatory and tax climate. We wouldn’t be driving business out with a stick; we would set up a business climate where they could prosper.”
The report notes that congressional approval would be required even if California voters support the amendment. Organizers are working to gather the 1 million signatures needed to place the measure on the November ballot.
The proposed amendment calls for an appointed board of commissioners to resolve the myriad issues involved, including the division of assets and liabilities and the establishment of final boundaries. If all goes as planned, the governor would submit the proposal to Congress on Jan. 1, 2018.
Other hot-button issues include the division of water rights, the public university systems, social services and the prisons. The report says multistate entities could resolve some of those questions.
The analysis also warns that any squabbles related to the division are likely to wind up in court and “persist for a long time.”
“Legal disputes between Virginia and West Virginia, for example, concerning the latter’s share of state debt lasted for about 50 years after West Virginia statehood,” said the 16-page report by legislative analyst Mac Taylor and finance director Michael Cohen.
Two of the proposed six states — Silicon Valley and North California — would wind up with higher per capita income than California’s current per capita personal income of $46,477, given that the state’s wealth is concentrated in the San Francisco Bay Area, the report said.
Silicon Valley would become the nation’s richest state with a per capita personal income of $63,288, surpassing Connecticut by $3,600, although it still would lag behind the District of Columbia. That means four states — West California, South California, Central California and Jefferson — would wind up with lower per capita personal incomes.
Revenue from sales and property taxes also would be distributed unevenly among the six states. Jefferson and Central California have the lowest personal income taxes and the lowest sales and property tax bases, although Jefferson would become a net exporter of water.
Mr. Draper said support for the six-state concept is highest in Central California and Jefferson because “the existing state is not working for them.”