By Mark Baldassare, research director, Public Policy
Institute of California
This opinion article appeared in the San Jose
Mercury News on June 22, 2003
Californians have a message for Gov. Gray Davis and the Sacramento political
establishment: Get our financial house in order or face the wrath of angry
voters. As in the tax revolt of 25 years ago that led to the passage of
Proposition 13, voters are so frustrated and disenchanted with the state's
political leadership today that they are ready to make drastic changes.
In recent weeks, it has become increasingly evident that the state may be on
the verge of another milestone: The first recall election of a governor in
California history. But public support for the governor's recall is just a
symptom of a deeper malaise that could shake up the state's entire governmental
system -- giving life to proposals to shift more power over spending and taxes
to local government.
The latest survey of 2,003 state residents by the non-partisan Public Policy
Institute of California shows a stagnant economy has put them in a restless
Most residents name jobs and the economy as their No. 1 concern. Twice as
many Californians say the state is headed in the wrong direction as believe it's
going in the right direction, and most residents believe that their region is in
an economic recession. On top of that, six in 10 predict that the state's bad
economic times will continue for at least 12 months.
Nowhere is this economic discontent more prevalent than in the Bay Area.
While most Californians' grim view of economic conditions has not changed
over the past year, the institute's surveys showed, there are now signs of
fundamental political discontent as well.
Only one in three voters say they trust the state government to do what is
right "most of the time" -- the lowest number since the institute began tracking
this question in 1998. Residents are also lashing out at specific members of the
state's leadership: Six in 10 likely voters are unhappy with the Legislature
overall, and three in four disapprove of the job the governor is doing.
Examining past opinion polls, Davis may just be the most unpopular governor in
modern California history.
The reason for this crisis of confidence is glaring: California is facing the
worst budget crisis in its history. As the governor and Legislature spar over
spending cuts, tax increases and borrowing in an effort to address the
staggering $38 billion deficit, the political stalemate over California's $100
billion budget places many state residents in real jeopardy. Most of the state's
spending is dedicated to four program areas -- public schools, higher education,
health and human services, and prisons and public safety -- that are all
critical to the economic well-being and quality of life of the entire
But political jockeying over the budget reflects no such urgency.
The Legislature recently missed a key budget deadline, and the state is
expected to start the new fiscal year July 1 without a budget in place. The
government is operating on short-term loans, while new debts are piling up.
From Surplus to Deficit
Not surprising, seven out of 10 likely voters are displeased with the way the
governor and the Legislature are handling the budget mess. They are not willing
to forgive and forget this basic fact: Their state leaders allowed a bountiful
state surplus to turn into a huge budget deficit. The governor's fiscal plan --
making up the $38 billion deficit through $19 billion in cuts, $11 billion in
long-term borrowing and $8 billion in new taxes -- is hardly a crowd
Faced with such spending cuts and tax increases, residents are feeling angry,
helpless and highly vulnerable to the economic shock waves that are likely to
emanate from state budget problems of this magnitude.
If we flash back to the eve of Proposition 13, there are eerie similarities
to the public's mood today.
Twenty-five years ago, the recipe for change included soaring housing prices,
skyrocketing property taxes, and the state government's inaction in the face of
financially threatening circumstances. Voters turned to the citizen-initiative
process in June 1978 to make the tax reforms they thought were needed to restore
This time, though, they are prepared to express themselves in different ways
at the ballot box. And Davis may be the first to feel the brunt of this attack
on the political establishment.
A substantial share of the 900,000 signatures needed to place a recall on the
ballot have already been collected, recall backers say. If passed, a recall
measure would remove Davis from office and replace him with the candidate who
gets the most votes. Currently, half of the voters support the removal of Davis
from office. With many Republicans hinting that they will run, the state may be
headed for a hotly contested race this fall or at the March primary.
New Look at Prop. 13
Californians are also contemplating making sweeping and somewhat surprising
changes in the once-sacrosanct Proposition 13 tax limitations. But the intention
is the same: limiting the power of state government. Indeed, the proposed
Proposition 13 reforms seek to shift the balance of power from the state to the
Most significant, there is a movement afoot to take aim at Proposition 13's
``supermajority'' requirement, which raised the bar from a 50 percent vote to a
67 percent or two-thirds vote so local communities could not easily raise taxes.
One such proposal -- led by the Silicon Valley business community -- calls for
reducing the two-thirds vote requirement to a 55 percent majority for local
In the past 25 years, local officials have found it difficult to win the
two-thirds vote needed to raise local taxes for local services. That has meant
local communities have become highly reliant on less-than-dependable state
funding. Earlier this month, for instance, school districts around the state
failed in their bids to make up for the expected shortfall in state funding
because they failed to secure the two-thirds approval vote required.
Nearly half of state residents say changing the two-thirds vote to a 55
percent approval rate for all special local taxes is a good idea. Certainly, the
public seems more willing to overlook the potential downside of a lower vote
threshold -- such as raising local taxes too often or overextending local
spending -- than it has in the past.
Increasing public support for local fiscal autonomy is another potential
byproduct of the state's current shaky finances. Proposition 13 required that
local governments collect property taxes, but put the Legislature in charge of
distributing those dollars to school districts and city and county
Local officials are resentful of the state's control of their local affairs,
and voters may be ready to support changes in the way their local taxes are
spent. Current proposals by civic leaders and local government officials focus
on dedicating local tax revenues to local services, such as schools, parks,
roads, public safety and libraries.
Bond Measures on Way
Another consequence of the budget deficit is that Californians may be
hesitant to support the major state-run projects that are headed for the ballot
next year. With the state poised to issue almost $11 billion in bonds to finance
a major portion of the budget deficit, will voters support a $12.3 billion bond
for school construction in March 2004 and a $10 billion bond for high-speed rail
in November 2004?
Currently, voter support for bond measures is holding up in our surveys, but
that may change as the reality of the ballooning state debt sinks in. If the
voters lose faith in state bond measures, then California is sure to fall
further behind in planning for future growth.
Unless the governor and Legislature can act soon to repair the damage to
their credibility, they are likely to face a season of voter discontent the
likes of which have not been seen for 25 years. Many of them may not return to
their seats in Sacramento, and those who serve may find that voters changed the
rules of the game.
Both the Democrats and the Republicans in office will be held accountable for
their inaction. It is not too late for the state's politicians to show they can
respond to the voters' wish list: a fiscally sound budget, stable funding for
local services and a plan to get the economy moving again.
But if the governor and Legislature can't deliver the goods, then the voters
are ready to take matters into their own hands -- again.