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Press Release · December 12, 2007

High Anxiety: Californians Edgy as Economic Woes Escalate, Progress on Policy Issues Stalls

Term Limits Initiative Lacks Majority Support, Despite Desire For Reform; Voters Ding Presidential Candidates On Issues

SAN FRANCISCO, California, December 12, 2007 — With growing fears about their personal finances and rising frustration over the lack of attention to the policy issues they care about, Californians are not in a celebratory mood as the new year nears, according to a survey released today by the Public Policy Institute of California (PPIC) with funding from The James Irvine Foundation. Their sour state of mind contrasts sharply with their optimism about many economic and political issues a year ago.

Two in three state residents (65%) expect bad economic times in the coming year—a six-point increase since September (59%) and a 26-point increase since January 2007 (39%). Likely voters are as negative, with 68 percent expecting bad economic times. In fact, Californians have not been this pessimistic about economic conditions since February 2003 (71% bad times). And the attitude is pervasive: Majorities across all the state’s regions and income levels say troubled economic times are on the way. These financial anxieties have only deepened broader concerns about the future: Half of Californians (52%) today believe the state is generally headed in the wrong direction—a 15-point jump since January (37%).


Why the dark mood? Spillover from the sub-prime mortgage crisis certainly has people edgy: About half of adult residents think the current housing situation in California will hurt their own financial circumstances a great deal (28%) or somewhat (24%). Renters (62%) are far more likely than homeowners (46%) to say the housing situation will affect their own finances. “This is an early warning of widespread fallout from the housing market crisis,” says PPIC president and CEO Mark Baldassare. “Renters are among the most vulnerable to economic shocks.” Reinforcing this point, Latinos (73%) and those with household incomes under $40,000 (63%) are much more likely than whites (41%) and those with incomes over $80,000 (46%) to expect the housing situation to have an effect on their own pocketbooks.

Not surprisingly, given the growing worries about everything from mortgage rates to housing prices, the percentage of Californians who name housing as the most important issue facing the state has grown, doubling from 4 percent in June to 8 percent today. In January, housing did not register as an issue. Economic misgivings are also reflected in the top three issues—immigration (18%), jobs and the economy (18%) and health care (10%). Since September, the percentage of state residents citing jobs and the economy as the most important issue has jumped by 5 points (from 13% to 18%). “Anyone who follows politics in California knows that this combination of concern about immigration and escalating economic anxieties makes for a highly charged and unpredictable political atmosphere, especially as we head into an election year,” says Baldassare.


Declining economic confidence is often accompanied by a slide in approval of elected leaders. Surprisingly, the opposite is true today at the state level—ratings for both Governor Arnold Schwarzenegger and the state legislature are up by a respectable margin. Governor Schwarzenegger’s approval rating is up from 50 percent in September to 57 percent today. Among likely voters, his support is up from 59 percent in September to 63 percent today. Although approval ratings for the state legislature continue to lag the governor’s, they have also risen by seven points since September among state residents (from 34% to 41%) and six points among likely voters (from 29% to 35%). Californians’ ratings of their particular representatives in the state legislature took a double-digit leap: 51 percent of state residents now approve of the job performance of their own assemblymember or senator, compared to 41 percent in September.

Why are state residents upbeat about their state leaders despite their grim economic view? One reason may be the ongoing special legislative session on health care—one of the key issues for Californians. As the governor and legislature try to address the issue of providing health care to all Californians, an overwhelming majority of adult residents (92%) think the number of people without health insurance is a problem in the state. Most state residents (71%) and likely voters (63%) say they favor the current proposal to require all Californians to have some form of health insurance coverage, with costs shared by employers, health care providers, and individuals. Democrats (76%) and independents (71%) are more likely than Republicans (50%) to favor such a plan. As for the specifics, majorities of state residents continue to think it is a good idea to require health insurance for all California residents, with public programs for low-income people (75%), and to require employers to provide health insurance for employees or pay fees to the state to help cover health care costs (75%). They remain less enamored of a requirement that hospitals pay a fee to the state to help cover the costs of health care (47%).


“Californians are clearly holding out hope that their elected leaders can make good on their promise to provide health care reform,” says Baldassare. “But if they fail to act on this critical issue, there will be consequences.”

Another possible threat to high approval ratings is a looming budget crisis and how to handle it. The state Legislative Analyst has forecast a multibillion dollar deficit next fiscal year. Two in three residents (68%) support Governor Schwarzenegger’s recent call for a 10 percent cut in spending by state agencies. A sizeable majority (65%) also oppose the idea of tax increases being included in the governor’s budget. In fact, the percentage saying that tax increases should not be included in the budget has risen 14 points since January 2004 (from 51% to 65%). When asked how they would most prefer to deal with the state’s budget gap, more Californians prefer spending cuts (42%) to a mix of spending cuts and tax increases (36%). The potential for a partisan fight over next year’s budget is great: A majority of Democrats (51%) want to deal with the budget gap through a mix of cuts and taxes while most Republicans (61%) prefer spending cuts.


Ratings may be up, but one thing remains constant: Californians generally distrust government and see term limits as a check on the system. Two in three likely voters say that term limits are a good thing for the state. This view is shared across the political spectrum, although Republicans (76%) and independents (70%) are more likely than Democrats (54%) to say that term limits are a good thing. Still, despite this steadfast support, most likely voters (69%) also say that the state’s current system of term limits needs major (29%) or minor (40%) reform.

Proposition 93—the “Limits on Legislators’ Terms in Office Initiative Constitutional Amendment”—is a term limits reform measure on the February statewide ballot. When read the official title and label for this initiative, 47 percent of likely voters say they support the measure, while 38 percent oppose it. Majorities of Republicans (55%) and independents (52%) say they would vote yes on Proposition 93, while Democrats are divided (43% yes, 44% no). Of likely voters who would vote yes on the measure, 81 percent describe term limits as a good thing and only 25 percent believe major changes are needed.

Currently, there is solid support for two of the three key provisions of Proposition 93. Majorities of likely voters like the idea of reducing the total amount of legislative service from 14 to 12 years (67%) and allowing that service to take place in the assembly, senate, or a combination of both (58%). However, likely voters are divided about providing a transition period to allow current legislators to serve 12 years in their current house, regardless of prior service in another house (42% good idea, 46% bad idea).


Besides term limits reform, voters will be choosing among candidates in the presidential primary in February. Where do voters stand today? Among Democratic primary likely voters (Democrats as well as independents who say they will vote the Democratic primary ballot), Senator Hillary Clinton (44%) continues to lead the pack, followed by Senator Barack Obama (20%) and former Senator John Edwards (12%). Among Republican contenders, former New York Mayor Rudy Giuliani remains the frontrunner (24%), followed by former Massachusetts Governor Mitt Romney (15%), former Arkansas Governor Mike Huckabee (12%), Senator John McCain (11%), and former Senator Fred Thompson (10%). The story in the Republican race? Since September, support for Mike Huckabee has jumped 10 points (from 2% to 12%).

Overall, far more Democratic primary likely voters (71%) than Republican likely voters (54%) are satisfied with their choice of candidates. But regardless of party affiliation or ideology, likely voters have one thing in common: They are dissatisfied (58%) with how much attention presidential candidates are paying to the issues that matter to them. Majorities of Democrats (54%), Republicans (57%), liberals (56%), and conservatives (57%) share this view. What are the issues they would most like to hear the candidates talk about? The top mentions are immigration (20%), Iraq (19%), health care (14%), and the economy (10%).


When it comes to immigration policy in the United States, the vast majority of Californians (73%) and likely voters (76%) believe major changes are needed. Most state residents (61%) and half of likely voters (51%) think immigrants are a benefit to California because of their hard work and job skills, while fewer (32% residents, 42% likely voters) say they are a burden because they use public services. The belief that immigrants benefit the state has become more widespread over the past decade (from 46% in April 1998 to 61% today). Consistent with this perspective, most Californians (72%) and likely voters (63%) say that 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 eventually apply for legal status. But they shouldn’t drive: Half of state residents (52%) and 66 percent of likely voters oppose state legislation allowing illegal immigrants to receive a California driver’s license.


The war in Iraq continues to dominate the national landscape and distress the vast majority of Californians: Although seven in 10 state residents say things are not going well for the U.S. in Iraq, that negative view is down 5 points since September (from 74% to 69% today). A majority of state residents (60%) believe the U.S. should bring its troops home as soon as possible, while 35 percent think troops should be kept in Iraq until the situation has stabilized. Likely voters are more divided (50% bring troops home, 46% keep troops there). And as with all questions related to Iraq, there is a huge partisan divide: Democrats (71%) and independents (57%) want to bring the troops home as soon as possible while Republicans (72%) prefer to keep troops in Iraq until the situation has stabilized. Overall, more Californians feel that victory in Iraq is no longer possible than hold out hope for a positive outcome (59% to 35%).



  • Electoral College reform? Yes and no — Page 13
    Californians strongly support a long-standing idea to change the way the nation elects its president from the Electoral College system to a direct popular vote. Sixty-five percent of likely voters would support such a change. They are far more tepid about a recent proposal to change presidential elections in California from a winner-take-all system to one where Electoral College votes would be awarded by congressional district. Currently, likely voters are divided about this proposal, with 44 percent saying it is a good idea and 41 percent calling it a bad idea.
  • Can the government deal with disasters? Sometimes — Page 20
    Most Californians rate the government’s handling of recent wildfires in Southern California as excellent (26%) or good (50%). They are far less favorable about the response to the recent oil spill in the San Francisco Bay: Only one in three (33%) give an excellent (4%) or good (29%) rating, and 46 percent view the response as not so good (25%) or poor (21%). Not surprisingly given these results, residents express much more confidence in the government’s readiness to handle wildfires (40% great deal, 43% some) than environmental disasters (16% great deal, 47% some). Republicans are more likely than Democrats and independents to be confident about the government’s ability to respond.
  • Approval ratings of national leaders: How low can they go? — Page 21
    Large majorities of Californians and likely voters (67% each) continue to disapprove of President George W. Bush. Opinions of the U.S. Congress are similarly negative: 62 percent of state residents and 72 percent of likely voters disapprove of its performance.
  • Year of Education? Maybe not — Page 27
    Despite the governor’s much-publicized declaration that 2008 would be the Year of Education Reform, Californians appear to have other priorities. Only 7 percent of state residents name education as their most important issue, down from 18 percent in January.


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 November 27 and December 4, 2007. Interviews were conducted in English or Spanish. The sampling error for the total sample is +/- 2% and for the 1,015 likely voters is +/- 3%. The sampling error for the 444 Democratic presidential primary likely voters and the 346 Republican presidential primary likely voters is +/- 5%. 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.