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The Primary Election: Prediction Versus Results

CAPE forum explores state budget crisis

How did the March 2 election results compare with the predictions made at the Feb. 19 forum sponsored by the Center for Applied Professional Ethics (CAPE), “Managing the California Budget Crisis”?

For Professor Charles Turner, Political Science, the defeat of Proposition 56 confirmed his argument that Californians live in a “tax-phobic environment” where any tax increases are viewed as “too painful to bear.” Prop. 56, which would have allowed passage of budget-related legislative bills with a 55 percent vote instead of the current 2⁄3 vote, failed with a resounding 66 percent of voters against the measure.

Turner saw this initiative as preventing the budget from being “held hostage” by only 1⁄3 of the legislature, but the only message of the organized opposition, he said, was that “it might raise your taxes.” This message obviously resonated with the “fearful taxpayer” that Turner described in his “Ethics of Taxation” portion of the CAPE forum.

The fearful taxpayer thinks that California taxes are already too high, he said, but California’s rate is average among the 50 states. “We are not being overtaxed,” he stated unequivocally.

Many also believe that state spending doesn’t help them personally, Turner alleged. Spending for the public good—on schools, roads, parks, public health, and safety—benefits all, he declared, while special interest tax breaks benefit only a few. “Don’t we have a duty to help those less fortunate?” he asked.
Turner was not surprised at the passage of two propositions totaling $28 billion—Proposition 55, Kindergarten–University Facilities Bond, and Proposition 57, Economic Recovery Bond. “We are perfectly willing to buy things,” he said. “We just don’t want to pay for them.”

It is not good enough to “just say no” to taxes, Turner said. If we don’t raise taxes, we must decide what to cut—schools, police and fire services, infrastructure.

Professor Frederica Shockley, Economics, agreed: “It’s fashionable to be antitax, but eventually we must raise taxes or cut spending.” She portrayed the crisis as a tug-of-war between those who want lower taxes and those who want more government spending.

Shockley reviewed the local impact of proposed budget cuts, estimating the total Butte County impact at $25 million, with a loss of 760 jobs and a rise in unemployment from 7.7 percent to 8.5 percent.

The approval of Prop. 57 has not solved the budget crisis, Shockley later declared. “The governor convinced us to pass a bond measure to pay off another bond, and we still have a structural imbalance. We cannot continue borrowing to cover the deficit.”

Shockley said that there are major assumptions in the 2004–2005 budget that may not hold, forcing even deeper budget cuts. Medi-Cal cuts may be declared illegal, personal income may fail to grow by 6 percent as estimated, the prison system may not be able to eliminate the required $447,000, 000, and the governor may fail to negotiate the proposed half-billion dollar tax recovery from tribal gaming.

Gerald Beavers, director of the state Legislative Analyst’s Office from 1970 to 2001, traced the background of the current budget crisis. In the booming economy of the late 1990s, he said, the government spent extra funds on health, education, and tax relief, but failed to scale back spending or increase taxes when revenues declined. By the end of 2002–2003, California was $30 billion in debt.

Beavers blamed propositions that restricted the ability of the governor and the legislature to manage the budget, term limits resulting in inexperienced legislators choosing immediate results over long-term effects, and polarization and animosity among members of the legislature.

Even with the passage of the Economic Recovery Bond, Beavers expects higher taxes. “I don’t think there’s any other way out of this,” he said.

Professor Paul Persons, Political Science, and statewide academic senator, addressed the impact of the budget crisis on higher education, saying, “I don’t think we’re living beyond our means in education.” He compared some government cutbacks—reducing enrollment and penalizing students for taking too long to graduate—to “using a bazooka to go after a mosquito.”

Persons berated the “selfish and greedy people” who took advantage of the California system to get their own education but are not willing to pay for education of this generation. “We are on the verge of throwing away the advantages of an educated population,” he declared.

Perhaps California voters heard his warning when they voted to approve Prop. 55, which means that higher education facilities will now be upgraded to accommodate more students.

For information about other events of ethical interest in the spring 2004 CAPE series, contact CAPE Director Andrew Flescher at x5534.

Francine Gair