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As Budget Angst Grows, Californians Take Stock of Fiscal Options and Take Aim at Elected Leaders

Most Residents Believe State is in a Recession; Obama Leads McCain in Presidential Matchup; Clinton vs. McCain a Draw

SAN FRANCISCO, California, March 26, 2008 — Pink slips for public school teachers and other reductions in services for vulnerable Californians are making state residents reconsider the wisdom of using spending cuts to balance the budget, according to a survey released today by the Public Policy Institute of California (PPIC) with funding from The James Irvine Foundation. Californians are becoming increasingly gloomy about California’s precarious fiscal condition and bleak economic outlook. And that gloom is taking its toll in their assessment of elected leaders.
 
Nearly all Californians (94%) see the state budget situation as at least somewhat of a problem today. With the reality of state spending cuts hitting home, concern about the effects has grown dramatically. Today, 56 percent of Californians say they are very concerned about the effects of spending reductions in the governor’s budget plan, up 20 points since January (36%).
 
The upshot is that Californians are now apparently more willing to consider tax increases as part of a solution to the budget crisis. When asked how they would most prefer to deal with the state’s budget gap, 42 percent of Californians choose a mix of spending cuts and tax increases, up from 36 percent in December. And fewer seem to view spending cuts alone as an option (down from 42% in December to 30% today). Democrats and Republicans remain wide apart on budget solutions—but they have edged closer. Most significantly, Republicans today are less likely than in December to support dealing with the budget gap mostly through spending cuts (down from 61% in December to 50% today) and are more likely to support a mix of spending cuts and tax increases (up from 25% to 35%). One thing all sides can agree on? Majorities of Democrats (66%), independents (67%), and Republicans (69%) believe major changes are needed in California’s budget process.
 
“Californians are rethinking their priorities, given what they’ve learned about spending cuts over the past couple of months,” says PPIC president and CEO Mark Baldassare. “Beyond that, they are feeling financially squeezed as a result of the economic downturn. Any reduction in state services may only add to their sense of vulnerability.”
 
IT’S A RECESSION, STUPID
Although experts and elected officials are reluctant to utter the “r-word,” a solid majority of Californians (72%) say the state is already in economic recession. Over half (58%) believe that this recession is serious (26%) or moderate (32%). And they don’t expect it to get better any time soon: Most state residents (76%) expect bad economic times for California in the coming year—a 4 point increase since January (72%) and an 11 point increase since December (65%). Pessimism about the state’s economy is now at its highest point since the PPIC statewide survey was launched a decade ago. These growing fiscal anxieties only intensify broader concerns about the future: Nearly two in three Californians (63%) today believe the state is generally headed in the wrong direction—a 9 point jump since January (54%) and approaching the level of pessimism residents felt in the fall of 2003.
 
Things go from bad to worse when Californians consider the state of the nation. Seventy-three percent of state residents say that the nation is headed in the wrong direction, a 10 point increase from June 2007 (63%). Three in four residents (76%) also believe that the nation will experience bad times financially in the coming year, a 23-point increase from last June (53%). These are record-shattering levels of negativity about the direction and economy of the United States.
 
Not surprisingly, an increasing number of Californians are saying that the economy (35%) is the most important issue facing the state today, followed by education (13%), immigration (11%), and the state budget (8%). Mention of the economy has nearly doubled since December (from 18% to 35%).
 
AS THE ECONOMY GOES, SO GO APPROVAL RATINGS
With the state facing a multibillion dollar shortfall in revenues and the national economy slumping, do Californians think their leaders are up to the challenge? Increasingly, the answer is no.
 
At the state level, Governor Arnold Schwarzenegger’s ratings continue to slip. Currently, 44 percent of state residents approve of the way he is handling his job, down 6 points since January (50%) and 13 points since December (57%). And the governor is not alone in this downward slide: Approval ratings of the state legislature are also lower today (30%) than they were in January (34%) and December (41%). Residents have a more positive perception of their own assembly and senate representatives (42%), but this rating is significantly lower than it was in December (51%). Feeding the dissatisfaction with state leaders is a strong distrust of state government: Most Californians say they can trust Sacramento to do what is right only some of the time (59%), believe a lot of their tax dollars are wasted (57%), and view state government as pretty much run by a few big interests (63%).
 
Although things look bad for state elected officials, they could be worse. Job approval ratings for President George W. Bush have hit a new low: Only 24 percent of Californians approve of his performance as president, down 5 points since December (29%). Approval ratings for the U.S. Congress have remained relatively steady since December (from 31% to 33% today). However, Californians are slightly less likely today than they were in December to approve of their own representative’s performance (from 51% in December to 47% today).
 
While California’s U.S. Senators fare far better than President Bush and the Congress as a whole, their popularity has also taken a hit. Forty-four percent of Californians approve of Senator Dianne Feinstein’s job performance, down 5 points since September (from 49% to 44%). Senator Barbara Boxer’s job approval rating has dipped slightly to 41 percent today from 45 percent in September. Speaker of the House Nancy Pelosi receives positive marks from 43 percent of state residents, similar to her approval rating in September (45%). And Californians express even deeper distrust of their federal government than they do of their state government. Two in three Californians say they can trust Washington to do what is right only some of the time (64%), believe a lot of their tax dollars are wasted (63%), and view federal government as pretty much run by a few big interests (67%).
 
IRAQ: FIVE YEARS LATER
At the five-year anniversary, President Bush gets low marks for his handling of the U.S. invasion of Iraq: 72 percent of Californians disapprove of the job he is doing. Although state residents remain highly negative about the war—64 percent say things are not going well for the United States—the number holding this view has dropped 5 points since December (69%) and 10 points since September (74%). Even so, at 64 percent, Californians are far more negative than adults nationally (48%) about the war. They are also less likely to see the troop surge as a success: Only 34 percent of Californians say the deployment of additional troops to Iraq has made the situation better, compared to 42 percent of adults nationwide.
 
Despite the marginal improvement in attitudes about Iraq, the majority of Californians (58%) still believe the United States should bring its troops home as soon as possible (only 38 percent favor keeping forces there until the situation has stabilized). These opinions are similar to those in December (60% bring troops home, 35% keep them there). Californians (58%) are considerably more likely than adults nationwide (49%) to favor bringing troops home as soon as possible.
 
BRIGHT SPOT? POSITIVE ATTITUDE ABOUT IMMIGRANTS
Despite all the economic and political negativity, Californians are basically positive on immigration. A majority of state residents (59%) believe immigrants are a benefit to California because of their hard work and job skills, compared to 34 percent who say they are a burden because they use public services. Belief that immigrants benefit the state has increased substantially over the past decade: In 1998, only 46 percent of Californians held this view. “Conventional wisdom would predict that attitudes about immigrants would deteriorate as economic conditions worsen, but that hasn’t happened recently,” says Baldassare.
 
What about attitudes toward illegal immigrants? Here again, state residents take a positive view. Two-thirds (66%) think illegal immigrants should be allowed to apply for work permits that would let them stay and work in the United States, about the same percentage as one year ago (64%). Strong majorities of Democrats (73%), independents (62%), and likely voters (60%) believe that illegal immigrants should be allowed to apply for work permits, while Republicans are divided (48% should be allowed, 50% should not). Taking it a step further, seven in 10 Californians (72%) think most illegal immigrants who have lived and worked in the United States for at least two years should be given a chance to keep their jobs and apply for legal status; only one-quarter (25%) believe these immigrants should be deported. This supportive attitude is shared by majorities across all political parties (Democrats 80%, independents 72%, Republicans 52%) and among likely voters (65%) and is unchanged since December (72%).
 
MAKINGS OF A CLOSE PRESIDENTIAL RACE COME NOVEMBER?
California’s likely voters see the Democratic Party as more capable than the Republican Party on four key national issues. They give Democrats a 32-point advantage in handling health care (59% Democratic Party to 27% Republican Party), a 13-point advantage in handling the economy (50% to 37%), a 10-point edge in handling the situation in Iraq (48% to 38%), and a 5-point edge in handling immigration (42% to 37%).
 
So how do California voters feel about their potential choices in November? Six in 10 likely voters (61%) say they have a favorable opinion of Democratic Senator Barack Obama. Just under half have a favorable view of Republican Senator John McCain (49%) and Democratic Senator Hillary Clinton (45%). Most Democrats have a positive impression of Obama (78%) and Clinton (74%), and most Republicans have a favorable opinion of McCain (75%). Who wins the popularity contest among independent voters? More independents have a favorable view of Obama (57%) than of McCain (47%) or Clinton (35%).
 
If the election were held today, California’s likely voters would favor Obama over McCain by 9 points (49% to 40%). However, Obama and McCain split the independent vote (44% Obama, 42% McCain). Between Clinton and McCain, the race is a toss up: 46 percent of likely voters in the state support Clinton and 43 percent support McCain. Among independent voters, McCain has an 8-point edge over Clinton (44% to 36%). Nearly all likely voters (92%) say they are following news about the presidential election.

 
PARSING EMINENT DOMAIN INITIATIVES
Before we get to the nominating conventions and general election, however, California faces yet another primary. Two of the initiatives on the June 3rd primary election ballot—Propositions 98 and 99—would limit the government’s power of eminent domain. In fact, 71 percent of likely voters believe this power needs major (38%) or minor (33%) changes, but they are much more in favor of Proposition 99 to do that job. One reason may be that besides blocking state and local government from taking private property to transfer it to another private party, Proposition 98 also prohibits rent control. And 53 percent of likely voters believe that rent control is a good thing (39 percent think it’s bad). Proposition 98’s rent control limit may help explain why only 37 percent of likely voters would give it a yes vote (41 percent would vote no). In contrast, at least half of likely voters (53%) would vote yes on Proposition 99, which confines itself to barring government from taking an owner-occupied home to transfer the property to another private party. Republicans (45%) are more likely than Democrats (29%) and independents (36%) to favor Proposition 98, but they are also even more likely to support Proposition 99 (Republicans, 58%; Democrats and independents, 50% each).
 
OTHER KEY FINDINGS
Did you know that a majority of parents of children ages 13 to 17 (55%) think their kids don’t get enough outdoor time because they are occupied with television, computers, and electronic entertainment? For analysis of survey questions related to youth and outdoor activities, please visit the statewide survey page at www.ppic.org to view our latest Just the Facts publication, “California’s Youth and Outdoor Activities: Parents’ Perspectives.”
 
ABOUT THE SURVEY
This edition of the PPIC Statewide Survey is part of the Californians and Their Government series and is supported by funding from The James Irvine Foundation.  The survey is intended to raise public awareness, inform decisionmakers, and stimulate public discussions about the social, economic, and political trends that influence Californians’ public policy preferences and ballot choices.  Findings are based on a telephone survey of 2,002 California adult residents interviewed between March 11 and 18, 2008.  Interviews were conducted in English or Spanish.  The sampling error for the total sample is +/- 2% and for the 1,077 likely voters is +/- 3%.  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 a private, nonprofit organization 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.  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.
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