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Press Release · March 18, 1997

Good News In The Numbers Game

Debate Still Rages About Role of State, Local Government in California, But Study Finds Their Revenue Data Are Sound

SAN FRANCISCO, California, March 18, 1997–Ending years of doubt about the accuracy of data involving the effects of Proposition 13 and other initiatives on local government finances in the state, a study released today by the Public Policy Institute of California (PPIC) reports good news: the data are high-quality.

The study, authored by Michael A. Shires and Melissa Glenn Haber, is the first to examine the caliber of local public finance data published annually by the California State Controller’s Office. The study addresses concerns that the Controller’s report substantially undercounts locally raised revenues by failing to capture many of the special fees and charges that emerged in the aftermath of Proposition 13. After an exhaustive review of the financial records of more than 7,000 local government entities, the report concludes that the state data include virtually all of the public entities generating revenues at the local level.

“In order for Californians to have a reasoned debate about critical public finance and governance issues–from the appropriate role of state and local governments to the effects of the referendum process–we need to have confidence in the data we use,” Shires said. “While there is always room for improvement, we were pleased to find that the Controller’s information about local revenues is accurate and comprehensive.”

The report makes a number of specific recommendations about how the data can be improved. The authors suggest maximizing the timeliness of the information by instituting an Internet/Web-based submission process for local governments and making the data publicly available on a prompt basis.

A Review of Local Government Revenue Data in California is the first in a series of PPIC reports on California’s two-decade experiment with the initiative process: the use of direct democracy to limit representative government. Future publications will include a citizens’ guide to assessing state and local tax burdens and an analysis of the winners and losers under Proposition 13–twenty years later.

The Public Policy Institute of California is an independent, nonprofit organization dedicated to nonpartisan research on economic, social, and political issues that affect the lives of Californians. David W. Lyon is President and CEO of PPIC.