How California Became Ungovernable
A few hours after California voters approved his Proposition 13 tax-cut measure on June 6, 1978, a bibulous and exultant Howard Jarvis dropped his pants for the benefit of a few reporters gathered in his suite at the L.A. Biltmore.
A reporter had asked Jarvis why he was limping, so his ostensible reason was to show a large, ugly bruise, which he’d suffered in a fall a few days before, on his ample, boxer-clad behind.
The surprise gesture, however, also afforded the earthy and profane Jarvis a chance to display his contempt for the press and, by extension, the political class that had mocked him and opposed his cherished measure.
Thirty years later, the ghost of Jarvis and his legacy initiative still aim antipathy, scorn and disdain at California’s government and its leaders.
Proposition 13 was the first, and most far-reaching, in a cascade of political decisions over the last three decades that have shaped the thoroughly dysfunctional structure of governance in the state.
Simply put, California today is ungovernable.
As state and local officials struggle to weather a fiscal crisis that threatens to drive California into insolvency, they wield power with the damaged machinery of a patchwork government system that lacks accountability, encourages stalemate and drifts but cannot be steered.
In this system, elected leaders carry responsibility, but not authority, for far-reaching policies about public revenues and resources. That’s not governance — it’s reactive management of a deeply flawed status quo.
Here is a look at six key factors that have made California impossible to govern.
Proposition 13: The fiscal effect of Proposition 13 itself is only part of the damage the initiative did to California. Even worse have been the methods Capitol politicians devised to try to lessen the measure’s financial impact.
After Proposition 13 passed, then-Gov. Jerry Brown and the Democrat-dominated Legislature realigned — “tangled” would be more accurate — the relationship between state and local governments by effectively shifting control of remaining property tax revenue to Sacramento.
In a crisis atmosphere, they radically transformed California’s political landscape, taking power and responsibility for health, welfare, schools and other local services away from city councils, boards of supervisors and school boards, thereby establishing today’s chaotic maze of overlapping jurisdiction, which defies efforts at accountability.
Budget initiatives: Proposition 13 also ushered in an era of ballot-box budgeting, as fiscal initiatives became a favored special-interest tool to take control of public fund expenditures.
A series of post-13 initiatives — including measures creating the lottery, financing public schools by mathematical formula and earmarking revenues for special programs, from mental health to medical care — established an exquisitely complex state budget calculus that has hamstrung the rational operations of government.
Gerrymandering: The once-a-decade process of redrawing political maps based on the census has created an increasingly partisan and polarized Capitol atmosphere.
Reapportionment has become essentially an incumbent protection effort, as lawmakers craft districts for themselves that are either safely Democratic or safely Republican. In this way, the crucial contests are party primaries, not the general elections. Because primaries draw the most partisan voters, the most conservative Republicans and the most liberal Democrats tend to win the nominations that guarantee election in November.
The dynamic locks in ideological polarization in Sacramento, where lawmakers have little motivation to compromise.
Term limits: Despite the claims of backers, the 1990 term-limits initiative did not get rid of career politicians — it simply changed the arc of their careers. Instead of spending decades in the same Assembly or Senate district seat, legislators now begin to position themselves for the next office — or job as a lobbyist — as soon as they arrive in Sacramento.
The up-or-out system rewards short-term, self-interested political thinking more than long-term policymaking in the public interest. Term limits also make lobbyists, not the Legislature, the repository of Capitol policy expertise; that lobbyists are happen to be useful in raising campaign cash adds an overlay of soft corruption to the process.
Boom or bust taxation: Since Proposition 13, state government has become increasingly dependent on volatile sources of revenue — the sales, corporation and progressive personal income taxes — that generate annual shifts in tax collections corresponding closely to the business cycle.
When economic times are good, as during the dot-com and housing bubbles, money pours in and there’s little political incentive — in fact, term limits creates a perverse disincentive — for long-term financial planning.
When revenues contract, the Capitol has rarely made real spending reductions, preferring to wait for the next boom.
The two-thirds vote: California is one of only three states requiring a two-thirds legislative vote to pass a budget, one of 16 requiring a two-thirds vote to raise taxes — and the only state to require both.
The budget requirement has been in the Constitution since the New Deal; the tax restriction began with Proposition 13. In the polarized atmosphere of Sacramento, the two-thirds rules effectively hand a veto to the minority party. Under these conditions, stalemate and deadlock on key fiscal issues have become the political norm.
So what can be done about the dysfunction? In the next few weeks, a blue-ribbon commission is set to recommend sweeping changes in the tax system to stabilize revenue collections. Voters last fall approved Proposition 11, which takes away the Legislature’s power to draw its their own districts in favor of an independent commission.
Next year, as they elect a new governor, Californians also will vote on a system of “open primary” elections aimed at aiding moderates, and they also will probably decide on one or more initiatives to dump the two-thirds budget vote requirement.
California Forward, a bipartisan good government group financed by major foundations, is crafting proposals to conform government systems and processes to modern management methods. And the business-oriented Bay Area Council is pushing initiatives for a state constitutional convention, the first since 1879, to wipe the slate clean and build a new, rational structure for state government.
“The seriousness of the problem has reached a crescendo,” said Jim Wunderman, CEO of the Bay Area Council. “The public is making a statement, loud and clear, that they expect action.”
— By Jerry Roberts and Phil Trounstine
This piece appeared today, as well, in the Los Angeles Times.
You guys make it sound like the problems in this state began with Prop 13. Wrong. Prop 13 resulted because the counties were taxing people out of their homes with ever increasing residential property taxes. Property taxes, like most taxes, are regressive. Government in this state, at all levels, just loves to tax and spend. Now that the Democrats “own” the state no one will take on the all-too-powerful public employee unions. Until public employee wages and benefits are knocked back across the board, this state will only continue to sink. And, for a long time California’s agencies have been rank as the worst managed in the country. The entire state, county, and city governments need to be placed in the hands of the bankruptcy court, which in turn should appoint an expert, neutral party to overhaul everything that is terribly wrong about government in this state.
The LAST thing we need is a bunch of liberal dems in the Bay Area, home of extreme right political fanatical thinking to be the centerpiece of crafting a new State Constitution. I like my Constitution just the way it is, thank you very much.
Instead what we need is a Governor with guts to stand up to the state employee unions, and start slashing non-essential employees. Arnold is leaving office. I just don’t understand why he wont use the emergency powers that he has.
As Mike Stoker says, we are not a job bank, we should only employ the minimum amount of people required to get the job done. The State is hugely overstaffed. Cut the non-essential peeps, and the rest of our problems will continue to be what they are – petty distractions for folks just trying to live their normal lives.
“I like my constitution just the way it is, thank you very much.”
Spoken like a man who has never read the California state constitution! One of the longest and most complex constitutions of any state or federal government in the world, a play thing of wealthy special interests and naive populism, and the real source of our current political chaos.
By the way, Planet Forehead, the Governor tried “standing up to the unions” in 2005. How’d that work out? The reality is he can’t dictate terms to the Legislature any more than they can do it to him. It’s called “checks and balances” — you may (may!) have read about it in 6th grade.
“The state is hugely(!) overstaffed.” Wow. Amazing that you discovered that first. I’m sure everyone in Sacramento is slapping their (lesser) foreheads right now saying “why didn’t we notice that!”
Dude, the macho/testosterone bumper-sticker sloganeering that gets guys like you excited may sound great on am radio, but it doesn’t mean squat in the capitol.
Wow…how about you stick to the subject at hand and offer a constructive reply, or at least one with some substance. To toss out name calling and insults to invalidate a rcomment is entirely juvenile. I have a hard time taking someone serious when they attack someone’s physical appearance (as if we have a choice in the size of our foreheads). Genes are out of our control, but character….now that’s something we have the responsibility to create on our own!
Mike Stoker?!?? R u kidding? Citing Mike Stoker for sound advice is like asking Dick Cheney to teach shooting skills. Stoker is a rip, tear, plunder and pollute advocate from way way way back. His latest attempt to run for office (for the umpteenth time) is nothing more than tired extreme Republican dinosaur politics. Find another mentor Planet.
For all the blah-blah about how we need different legislators, I don’t read columnists’ call outs of specific legislators they believe would be replaced under an “open primary” system. For the most part voters are clumped together as people who share perspectives – and they elect representatives who generally share their perspectives. As long as we have to meet a 2/3 budget hurdle, there will be conflict. Decline-to-state voters already can pick a partisan ballot in primaries. And, decline-to-state registrants have full ballot access if they want to run for office. Further, swapping a few legislators only gets us closer to a 2/3 budget vote if the current Republicans drop below 1/3 power.
Every point is spot-on. Well done.
I totally disagree with the above poster, who seems to be saying little except that he thinks we can get out of this mess by cutting, cutting and cutting the budget again. That was not the point of this article.
Prop 13, ballot-box budgeting, term limits, gerrymandering and the two-thirds law — along with the patchwork of responsibility and budgeting among state and local entities — have made this state so difficult to govern. And it’s only going to get worse. We need a constitutional convention to clean up this mess and get California back on the right track. The approaches above have made things worse, not better, and it’s time for a fix.
[…] gurus Phil Trounstine and Jerry Roberts answer that question today in an op-ed piece they wrote for their website, CalBuzz, and the Los Angeles […]
The warning signs have long been coming, a lot like quake swarms signalling the coming of a larger, catastrophic event.
We’ve allowed our population to become segmented and factionalized, with a hundred special interests supported and protected while the public good is ignored or side-sidestepped and accountability has become a quaint word associated with “the old days.”
We long for leaders unafraid to address the issues of overpopulation, illegal immigration, and the decay of services essential to sustain us. Is anyone out there who is for California… and not just out for themselves?
I hear a lot of back and forth about prop 13 being done away with and I have to admit I’ve been pretty passionate about keeping it in place myself. But now I’m wondering how many properties are actually left in CA that retain their 1978 prop 13 tax rate. Whenever you buy a home your tax rate is re-set at the current rate, right? Well, in 31 years there’s been a lot of turnover – especially in the last 5 during the housing boom. Just in terms of propty taxes, how much is prop 13 really hurting CA?
Prop. 13 affects all purchases of residential and commercial property.
It’s true that there has been increasing turnover in single-family residential properties, but banks, insurance companies, and many other businesses haven’t sold their properties. Their property taxes have stayed low.
Excellent question I’ve often wondered about … exactly what percentage of homes in the state are still covered by Prop. 13?
A brilliant summary! Bravi!
I hope readers of the LA Times can tear themselves away from celebrity deathfest coverage long enough to read it. This is important stuff.
I might suggest key factor number seven: Legislators are paid too much. Or at least that’s what most voters seem to think. 😉
Implicit in Roberts’ and Phil Trounstine’s description is that another legacy of Prop 13 was that the public was freed from connectign revenue decisons with spending decisions. For a variety of reasons, one of the most sweeping tax cuts in history wasn’t paid for with dramatic reductions in government services. The biggest shortcoming of the ‘ballot box budget’ movement that followed Prop 13 is that voters were consistently asked to consider tax and spending issues separately. Who wouldn’t vote for tax cuts when it appears that we’ll still get all the govt services we’re used to. On the other hand, who in their right mind wouldn’t vote to raise spending (smaller classes, harsher sentences and bullet trains for instance) if you’re also not asked to pay for them? It’s like going to a all-you-can-eat buffet where the cover charge bears no relation to the cost of running the kitchen.
Taxes and revenues go up and down for many reasons. The real crux of the crisis is that through voter initiatives (begining basically with Prop 13), the state’s fiscal apparatus became institutionally biased in favor of cutting or limiting taxes while at the sametime obligating more spending whenever feasible.
The result is that voters want to hold politicians accountable for straightening things out even though we don’t want to be held accountable ourselves.
See my post on the Con Con message
3 steps to fixing the state
1) Governor who can Govern-not just make disaster movies.
2) Repeal 2/3RDs for Budget & Taxes.
3 Modify 98 so that debt repayment is exempt at least temporarily.
Check back at the end of 2011 and see if further tweaking or major surgery is required.
As far as redistricting goes the only change will be more Democrats will
be elected and 2/3rds reform might not take a prop.
An excellent article. They made a valuable point in reminding the reader that the way then Governor Brown and the legislature chose to implement Prop 13 did tremendous damage to city and county governments and local school boards by taking most of their funding away and making them dependent on the state. It was a big blow to local control.
It’s also worth remembering that Howard Jarvis got his opportunity because governments at all levels failed to cut back tax rates when real estate appraisals and taxes were shooting up with the inflation of the early 70’s, a time of 12% money market returns. The legislature brought out Prop 5, a reasonable and more equitable tax relief measure than Prop 13, but it was too late to overtake Jarvis.
The reforms suggested in the article should include some cap on the rate of increase of property taxes, or we could have a repeat of the Prop 13 mistakes.
Jerry and Phil, nice work. Too bad you couldn’t work in Michael Jackson and Farrah Fawcett, but maybe you’ll get some readership anyway.
Wally, I want to point out that just because there was a legitimate grievance behind Prop 13 doesn’t mean that Prop 13 isn’t the cause of the current fiscal mess. Politicians everywhere love to tax and spend, and state employee unions are likewise everywhere, but somehow only California, thanks to Prop 13, is in the process of cutting its own fiscal throat. There is such a thing as a bad solution to a problem.
Earl Beck, on the same line, thanks for reminding us that we are saddled with Prop 13 now, in part, because the Democratic legislature at the time was relatively indifferent to what was happening to small property owners. In the Fifties and early Sixties the small business/small property owner class was part of the progressive consensus, but we lost them to Jarvis and we’ve been paying for that ever since.
Banks, insurance companies and the like do not pay any taxes. Their customers do. Corporate tax rates in our state are already among the highest in the nation, and employers are voting with their feet.
Voters approve every lame-brained bond issue that sounds like fun. Our prisons are filled with drug offenders and hapless losers, not violent predators. We demand and get a state agency to regulate every moment of our day, every product we buy, every manufacture we produce. Many of these agencies duplicate what the federal government is already doing.
Does no one remember Jerry Brown brought us Prop 13????????????????
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