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State-Local Fiscal Conflicts in California: From Proposition 13 to Proposition 1A

By Elisa Barbour

Fiscal relations between California’s state and local governments have been contentious for the past three decades. The conflicts in intergovernmental relations can be traced back to Proposition 13, approved by the voters in 1978, as well as to subsequent state ballot initiatives that have fiscally constrained state, city, and county governments. By giving the state government more control over local revenue and also limiting state and local taxing and spending power, the voter measures have engendered a “zero-sum” political atmosphere in which fiscal considerations have dominated intergovernmental policymaking. However, many of the problematic aspects of the post-Proposition 13 local fiscal system have been the product not of ballot initiatives but of government actions or inactions. Within voter-imposed fiscal constraints, California’s state and local governments have had substantial room to shape fiscal and governance outcomes. This paper traces the evolution of the state-local relationship in California since Proposition 13 and concludes that California governments need to move beyond fighting over fiscal resources and to focus instead on the core problems facing the state.

Report

The State-Local Fiscal Relationship in California: A Changing Balance of Power

By Elisa Barbour, Fred Silva

Friction between California’s state and local governments has shaped fiscal policy and conflicts throughout the century. In The State-Local Fiscal Relationship in California: A Changing Balance of Power, J. Fred Silva and Elisa Barbour place such conflicts in a useful historical context.  In particular, they explain why the divergent histories of city and county government have magnified the consequences of Proposition 13.  After tracing shifts in city and county fiscal structures, they also examine current proposals to balance state and local fiscal power.  The authors conclude that California public finance reflects neither the potential benefits of state-run system nor those of a decentralized system.  Instead, it copes with fiscal stress through cost-shifting and competition between levels of government.

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