On Monday Feb. 23^rd at the Ojai Valley Democrats general meeting at the Ojai Art Center, we were treated to a very enlightening presentation about a poorly understood, often boring subject—the California State budget. Professor Scott Frisch of the Political Science Department at California State University Channel Islands (CSUCI) came and talked to us about our dysfunctional budget process. Prof. Frisch is incredibly knowledgeable about budget issues, in fact, it happens to be his specialty, and he really schooled us on the fact that the entire sordid mess is our own fault. 

With a subject like the budget, I know some of you might be congratulating yourselves on your decision to stay home and not come to the meeting, but I'm here to tell you that you really missed something. Scott came to tell us about the California budget process, which was timely considering the fact that the legislature had finally voted to pass a budget on the previous Thursday the 19^th. Ordinarily Prof. Frisch likes to use Power Point to navigate through the complexities of the budget process. Unfortunately, we didn’t have a projector for him to use, so he decided to "wing it". I know Power Point is an extremely helpful tool, but I don't think the presentation suffered at all from its absence. I often find that people have a tendency to slip into a television-watching, alpha wave mode when they are watching a screen and listening to a presentation. With a subject as complicated and--well, byzantine as the California budget process and history. It’s better that audiences stay on their toes.  

Prof. Frisch laid the blame for California’s perennial inability to pass a budget at the feet of the California electorate—aka us. He identified California’s direct democracy through the use of the initiative as the primary cause of our governmental morass. He outlined a series of past initiatives that led us to our current predicament. Below is a list of my impressions from the presentation and any inaccuracies or omissions probably come from my poor note taking and should not be attributed to Scott:

Prop 13 (1978) – This now infamous proposition basically upset the apple cart completely from the stand point of State revenue. It withdrew a stable revenue source -- property taxes, and cut them an average of 57%. Scott explained to us that property taxes are a more stable form of tax revenue than income taxes because incomes tend to vary. This meant that the State must get more of its revenue from other taxes that can vary widely and thus the revenue of the state became highly variable from year to year. This is not all that helpful from a budgeting perspective.

Since being enacted California’s public school system has seen a precipitous drop in most indicators comparing it to the rest of the country. Depending on which indicator is used, California is near the bottom of the list. How can this be happening in the richest state in the richest country in the world? Prop 13 is definitely one of the reasons if not the major reason.

Two-Thirds Majority Rule (1933, 1962) - Prop 13 also combined with the two-thirds majority rule, first enacted in 1933 requiring both houses of the legislature to pass by two-thirds any spending increase in excess of 5%. The rule was later modified in 1962 so that a two-thirds majority was required for any spending increase. Prop 13 added that the rule also applies to any new taxes. Further, it placed the same restriction on county and municipal governments seeking to raise special taxes. Prop 13 and this malodorous rule recently played out with a disastrous consequence locally with the Ojai Unified School District’s Measure P.

Measure P was an increase in property taxes to help the Ojai Unified School District deal with a projected $1.5 million budget shortfall that would force them to close school(s) and layoff staff.  From the OjaiPost: “(Measure P)… asks for… $89 per parcel (per year), is capped at seven years, and residents over 65 years of age are exempt.” Prop 13 required that a two-thirds majority of voters, 66%, was needed to pass this fairly innocuous, limited parcel tax. Measure P was billed as an effort to Save Our Schools (SOS). We all know how dire the situation is here in Ojai with our public school funding, to say nothing of the state as a whole. Measure P lost despite getting a majority of the vote. In fact, it received 65.95%. It failed by just 71 votes. Another way to look at this is, despite having won the majority by 1,726 votes, just 71 votes were able to defeat the will of the majority and basically disenfranchise those 1,726 people above the majority who voted in favor of the measure. The two-thirds rule is fundamentally undemocratic.

Vehicle License Fee – Scott informed us that for fifty years, from 1948 until 1998, the VLF was 2% of a vehicle’s value. This was another fairly stable revenue stream to the State. Starting with Pete Wilson and culminating with the sleazy machinations and fun of freaks like Republican Darrell Issa, the recall of Gray Davis and the election of the steroid-addled Arnold Schwarzenegger, the VLF was reduced by 67% to just .65% of a vehicle’s value. This is a tremendous loss of revenue to the State.

Prop 184(1994) – Another wonderful example of our direct democracy here in California is the 3 Strikes Law. Much has been written about this draconian law. There are endless debates about whether or not it has been effective, whether the drop in crime at the end of the 90’s was a result of this law or whether crime dropped anyway as a result of demographic shifts. All that noise aside, Scott informed us that from a budgetary prospective, Prop 184 is basically an unfunded mandate. It requires that tens of thousands of people be locked up and housed… forever. It provided no mechanism to fund this increase in prison population.

A record 7.3 million people are counted as “in the corrections system" nationwide because they are incarcerated, on probation or on parole. As of the end of 2007, there were over 2.25 million people held in local, state and federal prison nation wide. Private prisons held about 120,000 of them. The California state prison population is about 160,000 and as of last month California is going to have to cut that number by 30% because of rulings in federal court about overcrowding. By some sources, as of 2008, there were 41,284 people in jail on three strikes and the California Legislative Analyst’s office estimated in 2005 that the law cost taxpayers $500 million a year. Half a billion a year sounds about right for reactionary vengeance. Consider for a moment that our state currently spends nearly the same amount on prisons and corrections as it does on higher education. How about this startling fact; a first year prison guard with a high school diploma makes more than a first year college professor with a PhD. There is something fundamentally wrong here.   

Term Limits – Scott also told us about term limits in the Assembly and the Senate and how they adversely affect institutional memory and expertise when it comes to the immensely complicated issue of budgets. Budgets are hard. You have to have your own green eyeshade, maybe a pocket protector and I’m sure a calculator would help—probably one of those wide ones with the extra buttons. You also have to understand how it all works and how it has worked in the past. Term Limits, just six years in the Assembly and eight years in the Senate, is not a lot of time to gain that rather specialized knowledge. Scott pointed out to us that in the US Congress the men and women who had been there the longest often sat on the budget and appropriation committees because they knew how it all worked as a direct result of their longevity with the institution. 

Gerrymandering and potential solutions – There was a lively discussion throughout and many questions back and forth about how to fix the debacle that our state has become. I’ll briefly summarize them here.

Scott went into gerrymandering and talked about how its partisan nature perpetuated the problems outlined above. He seemed to think that Prop 11, which just passed in November, might help mitigate this problem. I actually don’t think Prop 11 is a good thing, but that’s a whole other matter.

Prof. Frisch then went on to talk about some potential fixes to alleviate these systemic problems. He pointed out that one of the least, if not the least representative state legislature in the country is our own. He suggested that in light of the nightmare budget fight we’ve just witnessed it might not be such a bad idea to actually increase the number of people in the Assembly and Senate. Now this may sound shocking at first, but it’s actually something I’ve thought of before for the US Congress. Thomas Jefferson originally wanted each representative in the House to represent no more than 20,000 people. If we held to that we would have a whole lot more representatives than our present 435 in the House. Similarly, here in California we only have 40 State Senators. That means that each Senator represents 846,791 people! Some representation, huh. An amendment to the State Constitution could be proposed, and an initiative could be voted on. However, this is likely to be a hard sell. People are taught not to trust politicians.  

Scott showed us a poll that seemed to indicate the citizens of California might finally be getting sick of the two-thirds rule. According to this poll, a majority (53%) said that the two-thirds rule should be eased. Of course, the poll was taken at the height of the budget impasse in January and the State had just stopped some four billion dollars in publics works including our own bridge project on the East side of town. An initiative to repeal the rule would be a very difficult battle, but it might win if it were fought correctly. The bottom line is that the two-thirds rule has got to go if we hope to move California in a more progressive direction. If we could pass budgets with a simple majority, a lot of the balance could be restored to the system. In addition to the undemocratic nature of the two-thirds rule described above, another major side effect of the two-thirds rule is that the minority party becomes disproportionately powerful. They can simply obstruct and force concessions. In fact, Senator Abel Maldonado (R-Santa Maria) did just that when he traded his deciding vote for a ballot measure on the June 2010 election to have Open Primaries here in California. I am against open primaries because they would seriously weaken our ability to nominate progressive candidates in the Democratic Party. Just imagine a scenario where the majority of Democratic voters want a progressive candidate and they vote for him/her, but then right-wing nuts like talk radio’s John and Ken on KFI start sending out a clarion call to their Republican and Independent listeners to go to the polls and vote in the Democratic primary against the progressive candidate. This will happen in this state if we have open primaries.

Like I said, if you weren’t there you missed a lot. I hope my synopsis didn’t do too much violence to Professor Frisch’s presentation, and I would like to sincerely thank him for coming up to share some of his knowledge. Scott also went into the ballot measures that we’ll be asked to vote on in the statewide election on May 19^th. All of the initiatives have to do with this budget deal that was passed on the 19^th of February. We will be having a speaker at the Democratic Club’s General Meeting in April about those measures specifically. I’ll post my understanding of them then.

Here is a link to Prof. Frisch's Power Point presentation.