Most Favor Governor’s Tax Proposal
‘Trigger Cuts’ Raise Concerns, Pension Reforms Get Support
SAN FRANCISCO, December 12, 2011—Most Californians favor Governor Jerry Brown’s proposal to temporarily increase the state sales tax and the income taxes of high earners, according to a statewide survey released today by the Public Policy Institute of California (PPIC), with funding from The James Irvine Foundation. Sixty-five percent of all adults and 60 percent of likely voters favor the proposal, while 28 percent of adults and 36 percent of likely voters oppose it.
The survey offers an early look at Californians’ views of the plan the governor hopes to put before voters in November to help close the budget deficit. It would raise $7 billion a year by increasing the sales tax a half-cent for four years and the income taxes of individuals earning more than $250,000 for five years.
Brown’s proposal—and competing tax plans being offered by others—comes at a time when nearly all Californians (93%) say the state’s budget situation is a problem. Most residents (62%) say their local government services—those provided by cities, counties, and public schools—have been affected a lot by recent budget cuts.
In Brown’s plan, money from the tax increases would go to K–12 schools. When Californians are asked a follow-up question about how they view his proposal if new revenue were to go directly to schools, 70 percent of all adults and 58 percent of likely voters favor it (27% all adults, 37% likely voters opposed).
"The governor’s plan includes some of the most popular ideas for raising taxes—higher taxes on the wealthy and more money for schools,” says Mark Baldassare, PPIC president and CEO. "At the same time, the major challenges in asking Californians to pass state tax increases are the low approval ratings of state elected officials and high levels of distrust in government.”
California faces automatic spending cuts in January to make up the state’s budget gap if—as expected—projected revenues fall short. Cuts would be made to K–12 schools, higher education, health and human services, and public safety. When residents are read a description of possible cuts, a plurality (41%) prefer to close the budget gap with a mix of spending cuts and tax increases. Fewer—30 percent—prefer to close it mainly with spending cuts (11% say mostly tax increases and 9% say it is okay to run a deficit).
With K–12 education making up a large share of the expected "trigger cuts,” a strong majority (85%) of Californians are concerned (53% very, 32% somewhat) about the potential effects on public schools.
Brown’s Approval Rating at 42 Percent—46 Percent Among Likely Voters
Californians couple their concerns about the impact of cuts with a widespread distrust of state government: 74 percent say they trust the state government to do what is right only some of the time or never, 57 percent say the people in state government waste a lot of taxpayer money, and 67 percent say the state government is pretty much run by a few big interests looking out for themselves and not for the benefit of all of the people.
Asked about their elected officials, 42 percent Californians approve of the job the governor is doing (30% disapprove, 28% don’t know), similar to ratings they have given him all year, except for declines in approval in February and March (34% each). Among likely voters, 46 percent approve, 36 percent disapprove, and 17 percent don’t know. About half of Democrats (55%) approve of the governor and the same proportion of Republicans (55%) disapprove.
The legislature’s approval rating is once again lower than Brown’s (25% adults, 16% likely voters).
Residents—Including Public Employees—Support Pension Reforms
The amount of money that state and local governments spend on public employee pensions or retirement systems is a concern for Californians, with a strong majority (83%) saying it is a problem (44% big problem, 39% somewhat of a problem). Brown has offered a pension reform plan, and there may be others on the November ballot. The PPIC survey asked about three key ideas in the governor’s plan and found support for all three among all adults and current public employees. Both groups favor:
- Increasing the amount that new and current public employees contribute to the annual cost of their pensions so that they pay a share equal to what employers contribute (70% adults, 62% public employees);
- Changing the pension systems for new public employees from defined benefits to a defined contribution system similar to a 401(k) plan (68% adults, 64% public employees); and
- Basing a new public employee’s pension benefits on the highest average annual compensation over a three-year period rather than on a single year of employment (60% adults, 66% public employees).
Pessimistic About State’s Fiscal Future, More Hope For Their Own
Pessimism about the state’s economy persists, with most Californians naming jobs and the economy the most important issue facing the state (63%) and saying that the state faces bad times in the next year (60%). Nearly half of Californians are concerned (27% very concerned, 20% somewhat concerned) about job loss in their families in the next year. However, while 43 percent of residents say the state is in a serious recession, the share of Californians who hold this view is down from a high of 63 percent in March 2009 and is at its lowest point since October 2008 (39%).
When it comes to their personal financial situations, strong majorities of Californians say they are only in fair shape (41%) or poor shape (25%). Far fewer say they are in excellent (6%) or good (27%) shape. About half (49%) say their financial situations are just about the same today as a year ago, while 35 percent say they are worse off and 15 percent say they are better off.
Looking ahead, Californians see better times ahead for themselves in the coming year than they do for the state’s economy. Over half (53%) say their financial situations will improve a lot (7%) or some (46%).
More Likely To See Themselves as ‘Have-nots’ Than ‘Haves’
With income inequality the focus of discussion nationwide, a solid majority of Californians (63%) say their own state is divided into the haves and have-nots—a similar result to September 2002 (61%). Across parties, 70 percent of Democrats and 60 percent of independents say the state is divided this way, while Republicans are split (48% divided, 46% not divided). When asked to categorize themselves, 48 percent say they belong to the have-nots, 39 percent of residents say are among the haves, and 8 percent volunteer that they are in neither group. By comparison, a national survey by the Pew Research Center/Washington Post found that more adults saw themselves as haves (48%) than have-nots (34%).
These findings are reflected in a significant shift among Californians: today, more than half (54%) believe that the government should do more to make sure that all Californians have an equal opportunity to get ahead, and 37 percent say people already have equal opportunity. In 2002, the reverse was true (52% equal opportunity, 43% government should do more).
Support Higher for Occupy Than for Tea Party Movement
Californians are more likely to support (46%) than oppose (37%) the Occupy Wall Street movement, and they are more likely to oppose (42%) than support (35%) the Tea Party movement. Nationwide, adults surveyed in a November ABC News/Washington Post poll, had similar views of the Occupy movement (44% support, 41% oppose) but were more divided on the Tea Party (43% support, 44% oppose).
Californians are divided about the influence of Wall Street on the U.S. economy, with 40 percent saying Wall Street helps more than it hurts and 44 percent saying it hurts more than helps.
Obama Approval Near Record Low, But He Is Favored Over GOP
Heading into an election year, just over half of Californians (53%) approve of President Barack Obama’s job performance, with likely voters more divided (48% approve, 47% disapprove). This is similar to Obama’s record-low approval rating in September (51% all adults, 47% likely voters).
In the Republican presidential race, Newt Gingrich (33%) leads among GOP likely voters, followed by Mitt Romney (25%). There is far less support for Ron Paul (9%), Michelle Bachmann (7%), Rick Perry (4%), Rick Santorum (4%), and Jon Huntsman (2%). In a matchup of Obama and a hypothetical GOP candidate, the president leads by 12 points (50% to 38%) among all likely voters (11% unsure).
How do likely voters feel about their choice of candidates? They are divided, with 49 percent satisfied and 45 percent unsatisfied. Most Democrats (57%) are satisfied, while Republicans are as likely to be satisfied (47%) as not (47%). Most independents (58%) are not satisfied.
Trust in Federal Government Drops
In the aftermath of the congressional supercommitee’s failure to reach an agreement on reducing the federal deficit, a record-low 20 percent of Californians approve of the way Congress is handling its job. Just 9 percent of likely voters approve.
Distrust of the federal government more broadly has increased 10 points since October 2010: today, 79 percent say they trust the federal government only some of the time or never (69% 2010). And 73 percent say the federal government is pretty much run by a few big interests, rather than for the benefit of all the people (21%). Likely voters are even more negative (85% few big interests, 11% benefit of all). Does the federal government waste a lot of tax money? Most Californians (63%) think so.
Californians are more likely to blame Republicans in Congress (44%) than Democrats (21%) for the supercommittee’s failure to reach agreement. Twenty-two percent volunteer that they blame both parties.
How should the federal deficit be reduced? Most Californians say closing tax loopholes for large businesses (69%) and increasing taxes on wealthy Americans (57%) should play a major role. Less than half say that reducing defense (46%) or Medicare (26%) spending should play a major role.
More Key Findings
- Most confident county can handle new responsibilities—page 14
State-local government realignment has strong support (69% in favor), and 63 percent express confidence that their counties can handle the shift in responsibility from the state. Fewer (53%) are confident their counties can handle the ongoing shift of state prisoners to county jails.
ABOUT THE SURVEY
The PPIC Statewide Survey was conducted with funding from The James Irvine Foundation. Findings are based on a telephone survey of 2,003 California adult residents interviewed on landlines and cell phones from November 29 to December 5, 2011. Interviews were conducted in English or Spanish according to respondents’ preferences. Findings on the two questions about the governor’s tax plan are based on interviews with 1,012 adults from December 2–5, 2011.
The sampling error, taking design effects from weighting into consideration, is ±3.6 percent for all adults, ±4.0 percent for the 1,316 registered voters, ±4.5 percent for the 901 likely voters, and ±8.1 percent for the 286 Republican primary likely voters. For the 1,012 adults interviewed starting December 2, it is ±5.0 percent. For more information on methodology, see page 25.
Mark Baldassare is president and CEO of PPIC, where he holds the Arjay and Frances Fearing Miller Chair in Public Policy. He is founder of the PPIC Statewide Survey, which he has directed since 1998.
PPIC is dedicated to informing and improving public policy in California through independent, objective, nonpartisan research on major economic, social, and political issues. The institute was established in 1994 with an endowment from William R. Hewlett. As a private operating foundation, PPIC does not take or support positions on any ballot measure or on any local, state, or federal legislation, nor does it endorse, support, or oppose any political parties or candidates for public office.