California in Crisis: What Went Wrong? How Can It Be Fixed?




Marisa Abrajano


Thad Kousser


Isaac Martin


Hugh "Bud" Mehan

UC San Diego social scientists recently tackled California's budget crisis, its effect on the state and possible solutions for recovery as part of a panel discussion at the San Diego Natural History Museum, titled "California in Crisis: What Went Wrong? How Can It Be Fixed?"

The panel of faculty experts included Marisa Abrajano, assistant professor of political science; Thad Kousser, associate professor of political science; Isaac Martin, associate professor of sociology; and Hugh "Bud" Mehan, sociology and director of the Center for Research on Educational Equity, Assessment and Teaching Excellence. Jeff Elman, dean of the Division of Social Sciences, served as moderator. Following is an expert from their presentation.

  • What are some of the notable events that have helped create our current problems in California?
    Kousser: California's fiscal problems have been a long time coming, but they crystallized in May 2009 when the voters overwhelmingly rejected the governor and legislature's special measures of spending cuts, tax increases and amendments. Over time, California has grown increasingly partisan, making it more difficult for legislators to come together on agreements. California has also experienced the biggest economic downturn since the Great Depression, which has created a stress test for our government system.

  • What are some of the origins of our current state fiscal problems?
    Kousser: The California constitution requires a two-thirds majority vote to pass the budget, which means that we have to bridge the partisan divide. Our budget process is slow and we have gridlock almost every year. Interestingly and in contrast to the budget passed last summer, polls show that in a time of crisis most California voters want a mix of spending cuts and tax increases. Last year, the budget was resolved purely through spending cuts. We have a budget process that does not deliver what the average voter wants.

  • If the consensus-based system for budgeting does not work for California, where did it come from? Why do we stick with it?
    Martin: We stick with the consensus-based system because we associate it with protection for homeowners. We have had a two-thirds supermajority rule for agreeing on a budget since 1933, and a two-thirds supermajority rule for raising taxes since 1978. Both rules were part of package reforms designed to appease homeowners who were angry about property taxes. The 1978 reforms, which were called Proposition 13 on the ballot, also included a valuable property tax break for long-term homeowners. And in polls today, homeowners say that they would prefer a simple majority rule to our consensus-based system — but they are reluctant to change "Proposition 13." Of course, we don't actually have a law called Proposition 13. What we have today are different articles of our constitution. We could certainly leave the property tax protections in place while changing the article that requires two-thirds of the legislature to agree.

  • What are some workable options for political reform to help California move forward with solutions?
    Kousser: California needs to fix these issues by balancing what is good and bad about the state government and giving something to the left and the right.

    First, we have a legislative, bill-writing system that works on majoritarian principles where a simple majority can pass a bill. This has helped us create innovative legislation, although sometimes California has moved too quickly or too far with this power. Second, we have a supermajority budget process that requires a two-thirds vote. I propose we shift to simple majority to pass the budget each year. The budget would get resolved more quickly and be shaped more closely to what the average voter wants. At the same time, give the minority party a bigger voice in the policy process by eliminating the "Suspense File," which gives the majority party the ability to kill a minority bill without a vote. Next, alter term limits so that leaders in charge of the budget in boom years will have to face the consequences during a bust. Finally, we have passed initiative after initiative that has written checks that the legislature has to cash. I propose ending "ballot box budgeting" by requiring that every initiative identifies a funding source for the proposal.

  • What has been the effect of immigration on California?
    Abrajano: There are many positive effects of the immigrant population in California, including replacing the baby boom population which is an issue in other countries, contributing to our state's cultural diversity and spurring economic growth and innovation. In California, 70 percent of immigrants have legal status. The remaining 30 percent causes the most concern — that California's undocumented immigrants are a drain on state education and healthcare resources. Economists have done extensive work to determine the fiscal impact of undocumented immigrants in California, but the issue is still up for debate. Some report that the contributions and costs balance each other out; others estimate that undocumented immigrants place a $4-5 billion burden on the state.

  • What can be done to fix the immigration issue?
    Abrajano: It's really a federal issue, but the federal government has not enacted any comprehensive immigration reform. It's clear that this has led to frustration among the public, and some states have even chosen to take it into their own hands — Arizona is one example of this. However, it's not likely that we will see any federal immigration reform this year, since this is a very sensitive issue for politicians to tackle, especially in an election year. Another concern is that there is a 15-20 percent gap in voter turnout for immigrants compared to the native-born population. As a result, politicians are not as accountable to the immigrant population.

  • How significant is the funding shortfall for California's education system? What are the consequences?
    Mehan: The current budget crisis has the potential to erode the commitment we've made for over a century to public education. Public education is a public good. Even if I don't have children in school at the present time, I benefit because my fellow citizens are more likely to make rational decisions as a result of their education.

    The shortfall of funding for public education is estimated at $18-26 billion. Specifically in K-12, the cumulative effect of cuts is estimated at $12 billion and the consequences are severe. California was once one of the top states in the union for per-pupil expenditure, whereas now, we are near the bottom of the list. We've seen lay-offs; increased class size; fewer counselors, nurses and assistant principals; and cuts in art, drama, music and physical education.

  • What can be done to get California's educational system adequate funding?
    Mehan: There are two ways to balance a budget. You can either cut back on expenses or you can add revenue to the stream of funding. Over the last several years, the state budget has been balanced entirely with cuts. We can address California's education shortfall by modifying the supermajority rule for tax increases so that tax revenue can be distributed in a more equitable way. We can increase revenue with an oil extraction tax for those taking oil from our state. Texas and Alaska have both imposed such a tax. "Sin taxes" on alcohol, cigarettes and other substances are also an option, which voters would consider if they knew where the funding would be directed.

"California in Crisis" can be viewed in its entirety on UCSD-TV at http://www.ucsd.tv/search-details.aspx?showID=18519.