Rebooting California

Gray Davis

The structural problems in California’s governance seem to resist solution, acknowledged Victor Gold, Dean of Loyola Law School downtown as he welcomed students, policy wonks, civic leaders, and other members of the public to his campus on Friday for a full-day symposium: Rebooting California: Initiatives, Conventions, and Government Reform. “Can we start over at least in part?” was his challenge as he invited us to listen as four expert panels shared their ideas “on the process we have to engage in to reboot what we used to call the Golden State.”

After hours of discussion, major comprehensive overhaul and true structural reform seemed unattainable. Though “exposing civic ills has become something of a cottage industry,” according to Dan Walters of the Sacramento Bee, the proposal to call a constitutional convention didn’t make it onto the November ballot. Band-Aids and tinkering are still the order of the day. So much for rebooting! While I will report at length on the ideas and analysis offered at the symposium (and those who wish to attend in cyberspace can now–or very soon–access the full proceedings at www.rebootca.org), let me cut to the chase for those who don’t want to read on. There’s one clear action that we as voters can take in November to solve at least one of California’s seemingly intractable problems. Vote Yes on Proposition 25 which would permit the passage of a state budget by a simple majority vote.

Why does it matter? This year, once again, California not only failed to pass a budget by the deadline but delayed it longer than at any other time in our history, causing chaos and hardship for vendors, employees, and municipalities while harming our credit with rating agencies and raising the interest we pay. Budgets are so contentious because a simple majority is not sufficient to pass one. Requiring a two-thirds vote means, in effect, that the minority rules by having the power to block any proposal. Budget agreement has always been difficult to achieve–more so in given today’s bad economy, polarized political climate and, in the opinion of panelist and termed-out former legislator Sheila Kuehl, a governor who offers opening gambits rather than serious budget proposals. A Yes on Prop 25 would bring our practice in line with other states, requiring a vote of only 50% plus 1. In addition, state lawmakers would permanently forfeit a day’s salary and living and travel expenses for each day past the budget deadline of June 30, creating an incentive for action. The requirement of a two-thirds majority vote to raise taxes would remain unchanged.

Sheila Kuehl

Sheila Kuehl

(And that two-thirds majority needed to raise taxes wouldn’t have put California in such a bad situation, said Kuehl, if it weren’t also the case that only a simple majority is needed to lower taxes. When the economy is good, she said, Republicans find it easy to pass a tax cut, but when state revenues decrease, it’s all but impossible to restore taxes to the previous level.)

There was general consensus in favor of Prop 25 with the exception of Jon Coupal, president of the Howard Jarvis Taxpayers Association, who argued that a two-thirds vote is appropriate for issues requiring a broad consensus as we can see from the two-thirds requirement in the US Constitution for certain government actions. (Making treaties and impeaching a president, as Loyola law professor Allan Ides pointed out later. Not for passing a federal budget.)

More on Fiscal and Budgetary Problems
“Just when you think it couldn’t get worse, it has,” said Coupal, whose organization was behind Prop 13 of 1977 that froze property taxes and, he argued, gets blamed for all the State’s ills, even the O.J. verdict. “California is a high-tax state by any measure yet we are not getting the services we are paying for.” (High-tax? “A myth,” countered Kuehl. California comes in 20th among the states.) Coupal believes Prop 13 should remain in force without amendment while John Heilman, mayor of West Hollywood agrees it should continue to protect homeowners but needs to be reformed. If a homeowner moves away or sells, the property is reassessed, but this rarely happens with business property. Corporations are shielded from reassessment and an increase in property taxes. The result? According to Kuehl, people are assessed an average of $16 per square foot for their homes while Disneyland pays only 5 cents per square foot.

“The state and local relationship is a mess,” said Heilman. Prop 13 is a big part of the problem, with taxes going to Sacramento instead of being kept locally. He’d like to do away with the 5-cents of the regressive sales tax that goes to Sacramento while he’s open to the controversial idea of a net receipts tax on services. Calling himself a fiscal conservative, Heilman said West Hollywood adheres to a policy of keeping at least 25% of local revenue in a rainy day fund. The state doesn’t do this, and state revenues being cyclical, local governments can’t plan their budget because cities can’t guess how much revenue Sacramento is “planning to steal this year to deal with the state’s budget crisis.” The city’s budget is due by June 30 only to be told in October, November, or December “we are going to take several million dollars away.”

Jon Coupal

Jon Coupal

That’s why Prop 13 has a stabilizing effect, according to Coupal. Unlike income tax and sales tax, revenues from property taxes are predictable.

(The need for a reserve–money set aside in good times so it will be there to tide us over during the bad–was echoed by many, including former governor Gray Davis in his luncheon address, pointing out that California did have a rainy day fund set aside during the Jerry Brown years.)

Constituents want services, Heilman said, and don’t understand why the city hasn’t the money to provide them. “Local governments can’t be a piggy bank for the State.” (Unfortunately, the apparently criminal behavior of local governments in Bell and Vernon creates a public relations disaster for the vast majority of municipalities that seek to regain control of their own finances.)

According to Coupal, Prop 13 “was a success in keeping people in their homes but a failure in restraining government spending.” In spite of “broad agreement there is dysfunction in the State of California,” he asked, “isn’t this the same system that was around in the 50′s and 60′s when things were working quite well?” He believes spending due to the government’s move to “redistribute wealth” led to the rise of ballot initiatives that complicate the budget process.

Some of us might agree, but see the wealth being redistributed upwards rather than as he sees it to the poor. As Kuehl noted based on her 14 years in the legislature, there’s been “a very organized and effective effort to demonize the people who benefit from government and to demonize government itself” on behalf of “a very rapacious agenda.” For example, she cited Governor Schwarzegger’s refusal to go along with an oil severance tax–California being the only oil-producing state that fails to collect this revenue. Alaska, under Sarah Palin, collected a 25% tax from the oil industry.

Coupal argued California has 12% of the population and 36% of the welfare rolls. “Welfare vouchers are cashed in Las Vegas casinos.” Another myth, according to Kuehl who pointed out the governor brought in Jeb Bush’s budget chief Donna Arduin (known for deep cuts in social services in Florida) with a mandate to audit accounts and uncover such corruption and she found very little. And yes, there are more state employees than in the past, she said, but that’s only because the state’s population has increased. The proportion of state employees to residents–nine to 1,000–has remained the same.

Former Assembly Speaker Robert Hertzberg, now Co-Chair of California Forward, a bipartisan group seeking citizen involvement in the push for fiscal reform, showed up to join the panel already in progress after moderator Walters compared him both to the White Rabbit (“I’m late, I’m late, for a very important date”) and the Energizer Bunny, always working. A two-year budget, rather than one that must be passed every year, would help, he said. (An idea endorsed as well by former governor Davis.) It would also free time for more oversight of expenditures once approved–something he now sees as lacking. The ups and downs of State funding streams don’t affect only municipalities, he said, but also the foundations that try to pick up the slack in providing services. “We can’t take it anymore,” organizations such as the California Endowment and James Irvine Foundation have told him. “We can’t plan.”

Electoral and Structural Reform
A major change in the rules will soon come into play with the open primary system approved by voters via ballot initiative in June. Voters will be able to cast ballots for any candidate in primaries regardless of party affiliation and the top two vote-getters, again regardless of party, will face each other in the general election. Because Democrats will be able to cross party lines to vote for Republicans and vice versa and independents will also vote in primary elections, the rationale is that moderate candidates will have an edge over extremists.

But Jessica Levinson, the director of political reform at the Center for Governmental Studies, foresees unintended negative consequences. As there is no official party designee, candidates can merely declare a preference for a party and this may not even be an accurate and true designation. She believes primary election expenditures will increase as candidates need to extend their campaigns to the entire electorate. Perhaps most troubling to her, Levinson believes the open primary creates almost insurmountable obstacles for third-party candidates to qualify for the ballot and she criticized court decisions on ballot access. “The court underestimates the important role the minor parties play,” she said. “The court says it’s to pick a winner,” and overlooks the way third parties make possible “a true, open, and robust debate.” She advocated a solution: changing the election code so that qualifying for the ballot would depend on getting a certain percentage of votes in the primary rather than as now in the general election.

Another significant change–unless it’s short-circuited by Proposition 27 on the November ballot–is that the California election district lines that are redrawn every ten years will now be the responsibility of a citizens commission rather than left to incumbent legislators who, said Justin Levitt, associate professor of law at Loyola, do have expertise in an area that is extremely complex. But they may also have “a tendency to conflate public, private, and partisan interest.”

Robert Hertzberg and John Heilman

Bruce McPherson, former Secretary of State, added the citizens commission “must meet in public and provide a written account of how decisions were reached.” But while candidates for the 14-member commission are still being screened to assure balance in demographics and political preference, Prop 27, if passed, would abolish the commission before it even begins work, returning California to the old system of party leaders meeting behind closed doors. At the same time, another, and contradictory, initiative (Prop 20) would entrust the untested citizens commission with redrawing the lines for US Congressional districts as well.

McPherson called for a reform of California’s term limits, now the most stringent in the nation. These restrictions have “thwarted institutional knowledge among members and the ability to address problems.” If voters still want legislators limited to 12 years in office, at least allow them to serve all 12 in the same house–a proposal that may appear on the 2012 ballot.

As for California’s ballot initiative process, McPherson considers this “the worst form of single-issue special-interest politics,” and quoted California’s Chief Justice Ron George, calling it “the tool of the very type of special interests it was intended to control.”

“Do you really think the initiative process is direct democracy?” asked Allan Ides. Crediting professor Karl Ralph Manheim with the phrase, he said instead “It’s directed democracy.” Directed by whoever has the deepest pockets.

Moderator Sherry Bebitch Jeffe, senior fellow at the School of Policy, Planning, and Development at USC, had the all too true quip: “You can only rent a legislator; you can buy an initiative,” while Jessica Levinson agreed “the inappropriate use of money in politics” is now the “gushing wound in California.”

But even ballot initiatives offered in all sincerity with the best of intentions can cause dysfunction because, as speakers throughout the day explained, they often mandate expenditures or change single procedures without considering the overall context and the unintended consequences that follow. With the plan for a constitutional convention seemingly DOA, the ballot initiative may seem a viable route to reform but Ides said when comprehensive reform is needed, adopting a single reform here or there won’t solve the crisis. Still, a yes on 25 is necessary because keeping the 2/3 vote requirement for a budget would be, in his word, “disastrous.”

Ides put forth one of the most potentially transformative proposals: replacing the bicameral legislative with a single larger house elected in part through a proportional representation system. Our legislature with its Assembly and its Senate, he said, is a historical remnant, replicating the federal system. But what makes sense on the federal level–in which the Senate assures equal representation to each state regardless of population or size, becomes irrelevant in California. To make the state more democratic, he believes the current winner-takes-all electoral system should be replaced, pointing out that most European countries have a proportional system.

If one party gets 51% of the vote, for example, and the other party gets 49%, the latter isn’t left with nothing but rather with the corresponding percentage of the seats. Third parties are able to gain seats as long as they get at least 5% of the vote. This makes every vote really count and gives a broader spectrum of the electorate representation of their choice. For California, his proposal includes increasing the size of the legislature to 320, with half of the members coming from a winner-take-all district and half having gained their seats through proportional representation.

“How are you going to pay for it?” asked Jeffe.

When a small state like Rhode Island has 435 legislators, surely, Ides thought, California could and should have more than 120 people representing 38 million Californians.

In contrast, both Coupal and former governor Davis spoke in favor of a part-time legislature–Davis stating they should sit in Sacramento no more than four months a year. (Davis also suggested party loyalty is not as deeply engrained in California as on the east coast: “In California, a party is something you go to.”) Over lunch he repeated the advice he gave Arnold Schwarzenegger on what makes a great governor: “A strong economy and rain in the north.”

Mechanisms for Constitutional Reform
This year, 2010, “was supposed to be the year of constitutional reform,” said Thad Kousser, associate professor of political science at UC-Berkeley. A state-wide coalition called Repair California had generated grassroots interest in calling a constitutional convention and academic conferences were already planned when it all fell apart, Kousser said. Instead we once again ended up with “piecemeal reform–individual constitutional amendments authored by individual authors at war with each other. Is this any way to rewrite a constitution?”

He pointed out some advantages, though, to the piecemeal system: with comprehensive reform, you lose the chance to try a reform, test the effect and only replicate what works. You risk sinking an entire reform package because of an unpopular provision. Or, you can go off the rails as “a runaway convention held hostage to a single issue,” said Steven Miller who was the attorney for Repair California. The problem with piecemeal reform, however, according to Kousser is that “warring reforms distort each other’s effects,” and many of these reforms will benefit only a single group that is willing to put money–lots of it–behind the campaign for approval.

Miller, calling himself an historical footnote, explained that Repair California ran out of money and couldn’t launch the two ballot measures the group drafted: one, to give voters the authority to bypass the legislature in calling for a convention and two, a second measure that would limit the convention’s scope to governance issues only. Though Repair California qualified for matching grants, individual fundraising didn’t bring in enough money to trigger the disbursements mechanism. In addition, “opponents included the large signature-gathering firms” that feared their industry would lose profits if the ballot initiative process were changed. (I knew there were firms that paid people to gather signatures, but had no idea it was an industry with so much clout.)

Joseph Grodin, former associate justice of the California Supreme Court, explained that in the federal system of the United States, each state retains some sovereignty but within the state of California legitimacy comes directly from the people.

Section 1 of Article 2 provides:

  • All political power is inherent in the people.
  • Government is instituted for their protection, security, and benefit,
  • and they have the right to alter or reform it when the public good may require.

So though from a legal point of view, it would have been desirable, he said, to pass the proposed amendments, the people–through popular sovereignty–could have called for a constitutional convention even without the ballot measures.

“If we want to do it,” he said, “I think we can.” But he added, “Should we want to?”

Ann Lousin, professor at John Marshall Law School, was a research assistant at the Sixth Illinois constitutional convention and worked on drafting the 1970 constitution for her state. She joined the panel via Skype to offer what she called the two key pieces of advice for any state planning a “concon”: “Preparation, preparation, preparation and Transparency, transparency, transparency.”

She said, “The state must start having conversations and finding out what people want.” You have to filter out desires that aren’t constitutional issues, such as wanting to combat global warming, but at the same time, whatever people say at hearings–even if irrelevant–you have to listen, really listen.

  • “After the state narrows down the issues, start getting a consensus.”
  • The process must be “open all the way. Airwaves and internet from Day One.” That means daily reports, weekly reports, and a way to get communications back from the public.
  • You need to get academic studies done beforehand. “Once the concon starts, you won’t have time.” And the taxpayers shouldn’t have to fund any studies. Get the universities to do it. Find someone to fund academic seminars.
  • The concon needs it “own staff, own public relations, own support.” You can’t let the legislature or the governor take it over.
  • If you want the work to get done, set a time to begin and a budget that expires a few months after the concon ends.
  • Get television and internet coverage of proceedings, gavel to gavel.
  • “Submit hot-button issues separately from the main document.” In Illinois, for example, the issue of whether to abolish the death penalty was voted on separately.
  • “The state must hold the ratifying referendum soon after the concon ends–so voters don’t get bored.” If they do get bored, the outcome will be in the hands of the extremes and of people who oppose any kind of change.

All excellent suggestions. But “conventionphobia is widespread,” said Raphael Sonenshein who served as executive director of the commission that reformed the Los Angeles City charter between 1997-99. Convention proposals have been turned down all around the country in recent years. He asked why we tend to copy the federal model and think about constitutional conventions when we might instead see what cities do when they need an overhaul. “Home rule [for cities and towns] is relatively recent,” he said. Municipalities have had to figure out their governance so, on the local level, “you get the idea that reform may be inevitable, not impossible.” He said, “No city that wanted to reform its charter would call a convention.” Commission members could be elected but are often appointed. (“Likely to be seen as an elitist group,” commented Judge Grodin.) They gain their legitimacy not through popular sovereignty, said Sonenshein, but through their expertise. After creating the blueprint for reform, the commission must use persuasion if the reforms are to be implemented.

A big advantage of going the commission route? “It’s dull,” Sonenshein said. A constitutional convention sounds risky and gets a lot of attention. A commission seems safe. His basic idea boils down to letting an appointed commission do a lot of hard work without fanfare and then maybe calling a big public convention to sell it.

Direct Democracy and the Initiative Process
Ten years ago, Gerald Uelmen, professor of law at Santa Clara University, was optimistic that judicial review would make the initiative process work in the interest of effective direct democracy. After Senate v. Jones in 1999, it appeared the court would hear pre-election challenges to initiatives to consider their constitutionality or issues of confusion or deception. Pre-election review seems essential to avoid the perception of undemocratic practice that will inevitably come up when the court must rule against a measure after the voters have already approved it.

But since Jones, the California Supreme Court has–in his opinion–earned a grade of F- on ballot initiative cases. For example, by law initiatives are required to adhere to the “single-subject rule” so that voters understand what they’re voting for and unrelated issues aren’t quietly tucked into a proposition. But in 2002, the Supreme Court in Manduley v. Superior Court saw nothing wrong with Prop 21, entitled the “Gang Violence and Juvenile Crime Prevention Act,” even though it also included provisions that expanded the Three Strikes Law to include new offenses committed by adults, with no connection to juveniles or to gangs. As Uelman pointed out, Three Strikes is a controversial law to begin with. Voters should have been able to understand very clearly that a vote for Prop 21 would expand it. The court has also refused to take the pre-election review route since Jones.

The initiative process is out of control, Uelman said. And lawmaking by initiative creates still another problem rarely mentioned: once an initiative is passed, the legislature cannot amend it or correct an oversight.

Christopher Elmendorf, law professor at UC-Davis, outlined other reasons that judicial review cannot fix problems in the process. Initiatives that modify the constitution are limited to those that amend the document but do not revise it. An amendment is supposed to better carry out the purpose of the constitution; a revision brings about fundamental change. But the basic commitments in our constitution aren’t even clearly discernible, he said. The courts won’t touch a case involving high political stakes if there’s the possibility of accusations of partisanship. And the court should not take jurisdiction if the case can’t be resolved without making a policy determination.

Elmendorf stressed that even when an initiative will likely cause a fundamental change in the balance of powers or other key principle, the court won’t act “unless it betrays its revisionary nature on its face” rather than in its effects.

A slight digression: I’ve long said (with some exaggeration) that the only ballot initiative I would vote for would be one banning all future ballot initiatives. But then in May, I attended a Zocalo Public Square program about the initiative process in Switzerland–a system that supposedly inspired our own when California instituted it at the turn of the 20th century as a reform measure. What I learned was that direct democracy can actually work. In Switzerland, a proposal gaining enough signatures goes first to the legislature which can endorse it, advise against it, or agree it addresses a problem that the legislature can then propose to fix. If the proponents of the initiative like the legislation, they withdrawn their petition. If the measure does go on the ballot, it takes two years for it to get to a vote. Town hall meetings address the issue. The media covers it. No television advertising is allowed.

Given the notion, alas, in this country that limiting media buys equals a restriction on free speech, the last part of the Swiss system apparently won’t work here. And as I learned Friday from speaker Bob Stern, president of the Center for Governmental Studies (and anointed in the Sacramento Bee as the “godfather of modern political reform in California”), California used to operate on a system of indirect initiative more like Switzerland’s: an initiative went first to the legislature and went on the ballot only if the legislature failed to act. With the public so fed up with the legislature today, it’s unlikely we will vote a return to that system any time in the near future.

Stern would like to see discussions between initiative proponents and legislators–something that now occasionally happens informally. He advocates permitting proponents to amend their initiatives after qualifying with the secretary of state (as long as the amendments don’t change the measure’s purpose) so that better drafted proposals will make it to the ballot. And voters should get clear and accurate information–available by email if you choose–as to who supports and who opposes a measure. Voters are not going to repeal the initiative process–coopted though it has been–but voters can improve it.

Political science professor Bruce Cain who is based in Washington, DC as part of UC-Berkeley’s center in the capital, joined us via Skype and expressed his hope that a group such as California Forward could include and energize more of the public in working toward a coherent set of principles for reform in dialogue–or dialectic–with the legislature. He stated that nothing is more important than revising the initiative process, but nothing is less likely and suggested that reform focus on the most dysfunctional aspect: ballot-box budgeting. He said voters don’t know the kinds of distortions that result as money is earmarked through the initiative process. The demand for government services continues and the local and state governments continue to provide “but the way they do it is through fees and bond measures and trickery.” And as speaker after speaker stressed, no initiative should be able to mandate spending or reserve parts of the state’s fund for a purpose without identifying the revenue source.

It sounds like California has been caught up in a vicious cycle: the voters try to allocate funds through the initiative process and this puts more constraints on the legislature which has to write the budget. When the legislature fails to do so, the voters lose confidence in their representatives and put more faith in the flawed initiative process.

Maybe California is barely governable under the best of circumstances. In a time of economic crisis and high unemployment, the problems multiply and the need for reform is greater than ever. But will an angry public trust the system?

Robert Stern was pessimistic. Even Prop 25 which seems so necessary may be in trouble. “The Chamber of Commerce will run a campaign: This will raise your taxes,” he warned. In the end, he concluded, “I think all the initiatives are going to go down because of the public mood.”

We’ll see in November.

Diane Lefer

Diane Lefer’s new book, The Blessing Next to the Wound, has just been published. Co-authored with Hector Aristizábal, it is a true story of surviving torture and civil war and seeking change (including change in how we treat our youth) through action.

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