California Crackup: How Reform Broke the Golden State and How We Can Fix It is not an easy book to read. It’s the type of book where every page contains something to make you tear your hair out and beat your head against a wall. It’s the type of book that makes you go off on long rants about legislative procedure to complete strangers in bars and coffee shops.
If you’re a person who ever reads the news or even occasionally goes outside, you’re probably aware that California’s government is not in good shape. Joe Matthews and Mark Paul‘s eminently readable treatise on our state’s flailing government argues that, no matter who we send to Sacramento, unless we tear up our state government from its very foundations, the only thing we can hope for is more of the same.
I spoke with Mr. Paul, who was previously a Sacramento Bee editorial page editor and deputy treasurer of California, about why he believes we’d have to pass a constitutional amendment to regulate chiropractors, his reasons conservatives should hate (and liberals should love) the infamous Prop 13, and why the best thing he thinks you can do with your ballot this November is to throw it in the trash can.
You start off the book by saying the problems facing California can’t be solved under the current system, why is that?
Because it’s not really one system anymore. Through more than a century of amendments and reforms, we’ve ended up with three separate governing systems all at war with each other. Doing the ordinary day-to-day tasks of government in California, particularly as we’re looking at another budget stalemate has become difficult–if not impossible. We’ve put ourselves into a situation where we have this machinery nobody can operate. It doesn’t matter who gets elected, we just keep repeating the same problems over and over again.
One of the main issues with the state is the initiative system. Does that hurt more than it helps?
The California initiative is unique; it’s the most inflexible initiative process in the world. There are something like 100 countries and 25 other states that have direct democracy but we’re the only one where an initiative, once passed by the voters, can’t be subsequently changed through normal legislative processes and has to be sent back to the voters for their approval. It creates a system where we’re governed by ghosts. Decisions made by voters 50 years ago are so deeply embedded in the system that it amounts to rule by ancestors.
A recent poll came out saying that 74% of Californians want to keep the initiative system but, at the same time, there’s a lot of people will vote “no” on every initiative as a protest vote against the entire process. Where do you think the average California voters falls on this?
Californians both love and hate the system the way it works today. They believe they ought to have a way to directly participate in lawmaking but they hate having to vote on so many things. They hate that the measures are so long and difficult to understand. They hate having a measure put in front of them, taking the time to vote on it, and then having it thrown out by the courts for being unconstitutional–we go through the entire process of passing an issue before we actually have a judicial determination of whether its constitutional or not.
More initiatives should be statutory and not constitutional. It’s almost as easy in California to amend the Constitution as it is to pass a law. When people are making what are, in essence, policy changes, they put them in the constitution because they’re much harder to change later. That’s how we ended up with this hugely long constitution full of stuff like all the regulations for the chiropractic profession, which were put there in the 1920s. Any time you want to change the rules regulating chiropractors, you have to pass a constitutional amendment. Constitutions are supposed to be about the rules of the game, the framework for government. They’re not supposed to be policy documents.
There are a couple individual propositions I’d like to talk about. The big one is Prop 13. How did Prop 13 change the way California works?
When you ask most people whether they like Prop 13, what it means to them is the fixed rate on property taxes and the assessment provisions that protect homeowners from rapid increases in property taxes when their home values go up. That’s what most people were voting on in 1978 and what average people understand Prop 13 to be.
While that’s an important part of it, what most people don’t understand, is that, in retrospect, the biggest changes brought by Prop 13 were the parts nobody ever talked about when it was initially on the ballot. It gave the legislature the exclusive power to divvy up the property tax revenues, all of which had been levied by individual governments (cities, counties, school districts, etc). Property taxes are still a local tax but it’s up to the legislature to determine who gets the money from it. It centralized lots of decision making about local government that used to be made in communities around the state and moved it all to Sacramento.
At the same time, Prop 13 also included a provision requiring a two thirds vote of the legislature on any tax bill that increases the amount of state revenue. At the same time that Prop 13 was centralizing power in the hands of the legislature, it was also making it more difficult for the legislature to actually accomplish anything.
Much of our politics over the last 30 years has been about how decisions that used to be made at the local level (how to fund schools, how to pay for infrastructure) are now made in Sacramento. I’m sitting here in Sacramento today looking out my window across downtown all all these office buildings that have been built in the past 30 years–most of which house lobbyists.
Since Prop 13 passed, California’s population has not quite doubled, but the number of lobbyists in Sacramento has gone up five fold and the amount of money spent lobbying the legislature has gone up ten fold. Private interests and local governments in California now spend more on lobbyists than the people of California spend to run their legislature.
Were these kinds of concerns brought up during the campaign for Prop 13 or was this something no one predicted?
There was some discussion of this. The California Taxpayers Association, a major anti-tax group, opposed Prop 13 for this reason, but nobody paid much attention to that at the time. A lot of people came to like the centralization after the fact. Business groups came to like it because there was now one-stop shopping. Rather than have to go out and fight local tax increases in jurisdictions all around the state, now you could bring your entire army of lobbyists to one place.
Liberals had long sought more centralization of government in California because there were a lot of interest groups that didn’t like it that there were conservative counties that didn’t have a strong safety net for poor people and seniors. In many ways, Prop 13 was an answer to a lot of liberal’s dreams.
There are a lot of ironies in the politics of how this stuff works. Normally, conservatives argue the best government is a small one that’s close to the people. But in order to have that, you have to give local governments the discretion to set their own policies to suit their circumstances.
Some communities want higher levels of taxation and more services and some are going to want lower ones. Conservative economists argue that’s a good system because, when that happens, communities compete with each other for businesses and residents who have differing preferences of levels of taxes and services. That’s a conservative ideal but getting there requires changing Prop 13. But, because Prop 13 is the core the California Republican party’s political identity, it prevents conservatives in California from realizing a central part of their agenda.
Going forward, what do you see as an ideal process for fixing things on a practical level? How could California get a new constitution?
There are two processes spelled out in the constitution. The first would be to create a constitutional revision commission. We’ve had a couple in the past half century. One in the mid-1960s that did some major revisions of the constitution and another one in the mid-1990s that did its work and then we had the internet boom and then everybody said, “never mind.”
California goes though these cycles, every time we finally look like we’re going to seriously reckon with out governing dysfunction, another boom comes and everyone goes out and plays. I suspect that’s not going to happen this time; we’re in for a long-term economic stagnation in the country.
Would the commission have to be called by the legislature?
Yes, the legislature would have to set it up.
Is that a super majority vote?
Almost everything that matters takes a super majority. It could do it’s work and then submit it to the legislature, which could pass it and put it on the ballot for the voters to approve, as they did in the 1960s. The other alternative is to create a constitutional convention. Right now, only the legislature can call one. It puts the vote on the ballot, the voters approve it, the convention does it’s work and then the voters decide to accept it.
Those are the only two methods which you can use to do a constitutional overhaul. Otherwise, you’re limited to single subject amendments limited to only one thing. That method of incremental reform is exactly how we broke the government in the first place.
Last year, The Bay Area Council last year drew up an initiative that would allow the voters to directly call a constitutional convention but they couldn’t raise enough money to get that on the ballot.
What led you to write California Crackup?
In some ways, it was triggered by what happened last year with the May special election. In 2008, the state was stalemated on the budget. We had an election in November and the Democrats went to the voters and said, “Here are our solutions to the budget.”
The voters liked what they heard and gave them a larger majority in the legislature. They go back to Sacramento in early 2009, faced with this enormous $40 billion budget problem, and the first thing they have to do with their new mandate, because of the super majority rule, was reach an agreement with the party that the voters had just rejected.
So, miracle of miracles, in February of 2009 they put together a solution for the budget crisis. Many of the big pieces involved changes in thing like the lottery, mental health funding and early childhood education that voters had passed by initiative. It wasn’t enough for just two-thirds of the legislature to agree on a solution across party lines, it was necessary to go and play “mother may I” with the voters and ask if they’ll approve the changes they agreed upon in a bipartisan way.
In May 2009, the voters said, “no, no, no, no” and opened a $6 billion hole in the solution. That really crystallized for me how we really have these three systems at war with each other.
Do you see either Jerry Brown or Meg Whitman talking about any of these issues in a substantive way?
No. The gubernatorial campaign is a campaign about things that are irrelevant to California’s future. It’s a campaign of people telling us the same old stories, most of them false, that they always tell in campaigns. It is totally beside the point.
The best thing you can do is vote for nobody for governor this year because the threshold for getting things on the ballot for fundamental reform depends on how many votes were cast in the previous gubernatorial election. If nobody in California were to vote for governor, it would be much easier and cheaper to get something done that actually matters.