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Press Release · May 26, 2005

Special Survey On The State Budget: Money Can’t Buy Happiness: State Coffers Grow, But Californians Remain Glum About Budget

Support for Special Election Drops, Voters Divided over Ballot Measures; Immigration Back on Public’s Radar

SAN FRANCISCO, California, May 26, 2005 — Despite a better-than-expected report on the state’s fiscal health, Californians find little to cheer about when it comes to the budget or the performance of their elected representatives, according to a new survey released today by the Public Policy Institute of California (PPIC) and The James Irvine Foundation.

The May 13th budget revision did little to change public perceptions of the state’s fiscal situation: 71 percent of state residents today view the gap between revenues and spending as a big problem, compared to 70 percent in January. Californians are evenly split in their opinion of Governor Arnold Schwarzenegger’s proposed budget, with 44 percent saying they are satisfied and 47 percent unsatisfied with his plan. There was virtually no difference in responses before and after the governor’s revised budget was announced. While responses to the proposal are somewhat more positive today than they were in January (38% satisfied, 55% unsatisfied), they are less favorable than the reaction to his proposal one year ago (50% satisfied, 41% unsatisfied).

The governor’s revised budget reported several billion dollars more in state revenues than had previously been projected. How would state residents spend those additional dollars? Californians would rather support K-12 public education (76%) than reduce the state debt (70%) or increase funding for transportation (53%). Democrats (85%) and independents (80%) are more likely to choose education, while Republicans (78%) show greater support for debt reduction. How did the governor allocate the additional revenue? His revised budget focused on debt reduction and transportation projects.

“Governor Schwarzenegger did not see a boost after the good news of the May revision and this might reflect the fact that some residents perceive that he does not share their priorities,” says PPIC Statewide Survey Director Mark Baldassare. The governor’s overall ratings remain at a low point (49% disapprove, 40% approve) and are virtually unchanged since April. Fewer Californians than in January approve of his handling of the state budget (from 48% to 37%), transportation (from 35% to 28%), and K-12 public education (from 34% to 29%). In fact, Schwarzenegger has a lower approval rating on education issues than then-Governor Gray Davis in January 2000 (29% to 51%).

Californians Have Little Budget Knowledge, But Big Expectations for Their Role in the Process

Consistent with his January proposal, the governor’s revised budget included a variety of spending reductions but no new taxes. Where does the public stand? Most Californians (72%) express concern about the effects of budget cuts in the governor’s plan. Forty-three percent favor a mixture of spending cuts and tax increases, 29 percent favor mostly spending cuts, and only 11 percent prefer mostly tax increases. Although 47 percent of Californians oppose new taxes, 46 percent think tax increases should have been included in the budget plan. So who should pay to help get the state out of its current financial hole? Someone else. As in past PPIC surveys, a majority of Californians support raising the tax rate on the state’s top income bracket (68% favor, 29% oppose). They also favor raising state corporate taxes (60% favor, 35% oppose). However, they steadfastly oppose increasing the state sales tax (71% oppose, 27% favor) and extending the sales tax to include services (63% oppose, 32% favor).

While 46 percent credit the governor and legislature with making at least some progress in solving the state’s budget problems, only 7 percent think they have made a lot of progress. Who do Californians want to make the tough choices involved in the current state budget? Thirty-eight percent favor Democrats in the legislature, 24 percent prefer Governor Schwarzenegger, and 18 percent prefer Republicans in the legislature. Support for the legislature on this dimension is notable, given that their dismal approval ratings (26%) are at the lowest point since August 2003 (28%) and are down substantially since January (37%).

Ultimately, state residents trust themselves to make the tough calls: 72 percent believe voters should make decisions about the budget and governmental reforms rather than abdicate that responsibility to the governor and legislature (25%). But when it comes to the budget, how much knowledge do residents bring to the table? Only 29 percent of Californians can identify the top category for state spending (K-12 education). Only one third (32%) correctly name personal income taxes as the main source of state revenue. And only 11 percent of Californians correctly identify both the biggest spending category and the largest revenue source.

Special Election Loses Steam…

The governor has said that he might call a special election in 2005 to allow voters to decide on a package of reforms; this idea has lost considerable support since the beginning of the year. Today, 62 percent of likely voters say it would be better to wait until the next scheduled statewide election in June 2006, compared to 52 percent who held this view in January. Support for a special election has dropped among Democrats (from 34% to 24%), Republicans (from 58% to 46%), and independents (from 47% to 37%).

California voters are mixed in their responses to the specific set of reforms being proposed for the special election ballot. Forty-one percent of likely voters say they would vote in favor of legislative redistricting reform, while 40 percent would oppose such a measure. One reason for the lack of clarity? Voters do not appear to be strongly motivated to make redistricting reforms at this time: While about one in three likely voters (37%) believe that the current process needs major changes, about half believe that minor changes are all that is required (26%) or that the system is fine the way it is (23%).

Support is also divided for an initiative that would limit state spending. This fiscal reform measure is backed by 43 percent of likely voters, while 37 percent are opposed and 20 percent are undecided. While they are ambivalent about redistricting, many registered voters do believe that the state budget process needs major changes (59%), a view held by Democrats (62%), Republicans (59%), and independents (55%). Likely voters like the notion of limiting increases in state spending each year (62%), but they oppose the idea of allowing the governor to reduce spending for budget items without legislative approval (63%). On a related note, likely voters also strongly oppose eliminating minimum spending requirements for state programs such as K-12 education (62%). Half (54%) oppose and 41 percent support lowering the majority required to pass a state budget from the current two-thirds to 55 percent.

… And Distrust of Government Lingers

Californians continue to express profound distrust of their state government. Today, only 29 percent say they can trust the government to do what is right just about always or most of the time, compared to the pre-recall low of 27 percent in October 2003. Most Californians say that state government is run by a few big interests, a view held by majorities of Democrats (72%), Republicans (67%), and independents (64%). And a majority (55%) believes that “a lot” of state tax dollars are wasted by people in state government. The public’s view of Governor Schwarzenegger as a reformer has certainly been tarnished by their general lack of faith in state leadership: Only 40 percent of Californians today approve of his handling of government reform, compared to 58 percent in January.

Immigration a Front-Burner Issue for Republicans

Although Californians express serious concern about the state budget, it ranks fifth on their list of top issues facing the state. The economy (20%), education and schools (19%), immigration (9%), and crime, gangs, and drugs (8%) are seen as the most pressing topics. Democrats and independents (24% each) are most likely to name education as the most important issue facing the state. But in a shift since January – when Republicans named the state budget as their top concern – Republicans today (21%) put immigration at the top of their list. Whites (13%) are twice as likely as Latinos (6%) to say immigration is the top state issue.

Given his recent comments about immigration, how do Californians rate the governor’s performance in this area? Fifty percent disapprove and 31 percent approve of his handling of illegal immigration. Majorities of Democrats (58%) and independents (52%) disapprove, while a majority of Republicans (53%) approve. Latinos – who are more negative than whites about all areas of the governor’s performance – are especially scathing in their assessment of his handling of illegal immigration: 78 percent disapprove and 14 percent approve.

More Key Findings

  • Proposition 13 Loses Some Luster — Page 12
    Since February 2003, the percentage of Californians saying Proposition 13 has turned out to be a bad thing has climbed 16 points (from 21% to 37%), while those saying it is mostly a good thing has declined by 10 points (from 57% to 47%). A majority of Californians (55%) say they dislike the disparities in property taxes paid by owners of similar homes. However, a majority (56%) still supports the two-thirds vote requirement for the passage of local special taxes.
  • Pessimism About State’s Direction, Economy — Page 14
    More residents today say the state is headed in the wrong direction than the right direction (57% to 35%) and say they expect bad economic times rather than good times in the next 12 months (49% to 39%).
  • President Bush Sees Ratings Decline… — Page 18
    President George W. Bush’s approval ratings have fallen since January and are now similar to his ratings one year ago. Forty percent approve and 56 percent disapprove of his performance in office.
  • … But Individual Members of Congress Remain Popular — Page 18
    U.S. Senator Dianne Feinstein receives majority support from state residents (52%) and likely voters (56%) for the way she has handled her job. Nearly half of Californians (49%) and 52 percent of likely voters approve of U.S. Senator Barbara Boxer’s performance in office. Majorities of adults (54%) and likely voters (58%) approve of the performance of their own representative in Congress.

About the Survey

The California State Budget Survey — a collaborative effort of the Public Policy Institute of California and The James Irvine Foundation — is a special edition of the PPIC Statewide Survey. This is the fifth in a series intended to raise public awareness, inform decisionmakers, and stimulate public discussions about the current budget and the underlying state and local finance systems. Findings of this survey are based on a telephone survey of 2,003 California adult residents interviewed between May 10 and May 17, 2005. Interviews were conducted in English or Spanish. The sampling error for the total sample is +/- 2%. The sampling error for subgroups is larger. For more information on methodology, see page 19.

Mark Baldassare is research director at 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. His recent book, A California State of Mind: The Conflicted Voter in a Changing World, is available at

PPIC is a private, nonprofit organization dedicated to improving public policy through objective, nonpartisan research on the economic, social, and political issues that affect Californians. 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.