Category: Political Landscape

Video: The Future of Local Taxes

The parcel tax is unique to California, said economist Jon Sonstelie, because it is a revenue alternative that navigates the constraints of Proposition 13. Sonstelie, PPIC Bren Fellow and a professor at UC Santa Barbara, evaluated the tax in his new report Parcel Taxes as a Local Revenue Source in California and presented the results last week in Sacramento. He noted that between 2003 and 2012, cities, school districts, and local districts put 691 parcel tax proposals to fund services on the ballot, and 53 percent received the two-thirds vote required for passage. Most of these taxes were relatively small. The median was $60 for cities, $96 for school districts, and $68 for special districts.

Following the presentation, a panel discussed the future of local taxes in an era of increasing local authority. Patrick Murphy, PPIC research director, moderated the discussion. Participants included Michael Coleman, principal fiscal advisor to the League of California Cities; Robert Gutierrez, director of the California Tax Foundation; and Marianne O’Malley, managing principal analyst on state and local finance at the Legislative Analyst’s Office

The Importance of California’s Tax Ranking

California voters are often asked to make important tax and spending decisions at the ballot box, yet their mastery of basic fiscal facts is poor. PPIC’s surveys have consistently found a “knowledge gap” between what voters know and budget realities. In our January PPIC survey, just 8 percent of likely voters correctly named both K-12 public education and the personal income tax as the top state spending and top state revenue areas. The voters failed to grasp the state’s budget details even when the fiscal crisis took center stage and California grappled with massive deficits, spending cuts, and tax increases.

But survey respondents just passed another fiscal pop quiz with high marks. With the April 15 tax deadline approaching, seven in 10 likely voters in the March PPIC survey say that California currently ranks “near the top” (45%) or “above average” (26%) in state and local tax burden per capita compared to other states. Large majorities gave this response in earlier PPIC polls. In this area, the public’s perceptions are in line with fiscal reality.

California’s tax ranking varies depending on data and methods, but we are always on the high side in national studies of the 50 states. Recently, California ranked #4 in the Tax Foundation report and #15 in the Tax Policy Center report on state and local tax burdens. The reasons include our high cost of living and the public investments that we are making in our education system, environmental quality, and infrastructure.

What is most striking is the growing share of likely voters who say that California’s state and local tax burden is “near the top.” In the March PPIC poll nearly half (45%) express this view. The increasing number of voters who perceive the tax burden this way runs counter to other trends: the governor’s and legislature’s approval ratings are rising, more Californians say that the state is headed in the right direction, more say the economy is experiencing good times, and fewer say the state government is in a budget crisis.

Interestingly, the growing perception that California’s state and local tax burden is “near the top” is taking place in the years since the voters passed the Proposition 30 tax increases in November 2012.

Two groups known for their anti-tax sentiment—Republicans (50%) and conservatives (52%)—are predictably among the most likely to say that our state’s tax burden is near the top. Surprisingly, though, this view is widely held in more politically diverse circles—those annually earning $80,000 or more (58%), independent voters (52%), those living in households with children (51%), college graduates (49%), Latinos (48%), and homeowners (47%). About four in 10 Democrats (38%) and liberals (44%) also say that their state’s tax burden is near the top.

Importantly, the view that California is a national leader in high taxes has implications for fiscal preferences. Likely voters are closely divided on a Proposition 30 tax extension (48% favor, 45% oppose). But the majority (55%) of those who oppose a Proposition 30 tax extension say the state’s tax burden is near the top. Most likely voters say they want major (53%) or minor (31%) changes in the state and local tax system. The majority (52%) who want major changes also say that the state’s tax burden is near the top.

There are many reasons why tax proposals are a tough sell even in Blue California. They include high government distrust and little fiscal knowledge. We have identified a major force to be reckoned with as tax initiatives take shape for the 2016 ballot: a widely held perception that Californians are among the most burdened with state and local taxes in the nation. Tax proponents will have to convince voters that their plans will improve California’s ranking—as the state with the most promising future.

Testimony: Four Important Questions about Voting in California

PPIC research fellow Eric McGhee was invited to testify about voter turnout in California last week before a joint hearing of the Senate Committee on Elections and Constitutional Amendments and Assembly Committee on Elections and Redistricting. Here are his prepared remarks.

California’s voter turnout in 2014 hit record lows in both the primary and the general elections. I’d like to put that turnout in broader context, and give some thoughts on potential solutions. In doing so, I’m going to briefly answer four questions:

  1. Who votes, and who doesn’t?
  2. What does California’s turnout look like over time and compared to the rest of the country?
  3. What are some of the reforms that have been tried in the past, and how well have they worked?
  4. What are the other possible reforms out there that have yet to be tried in California?

Who votes and who doesn’t?

California’s electorate does not look like the state as a whole. Compared to non-voters, California’s voters are older, whiter, more educated, less likely to have recently moved, more likely to be homeowners, and more partisan. They are also wealthier, though most of the difference in income between voters and non-voters is a function of the more powerful effects of other factors such as age and education. And, PPIC research by Mark Baldassare has shown that non-voters have different opinions on important policy issues. In particular, they tend to be more supportive of a larger role for government.

These differences are very similar to what one would find in the rest of the country, but California’s profile on all of these dimensions is at one extreme. The state is relatively young, relatively mobile, with an especially large non-white population.

Beyond all these demographic and attitudinal issues looms citizenship. Citizenship is a much more important issue in California than in other states, given the large non-citizen population we have here. It particularly affects the Latino and Asian American communities. That said, it is becoming a less important issue over time, since virtually all the population growth in these communities is now among native-born citizens.

What does California’s turnout look like over time and compared to the rest of the country?

California’s turnout has dropped between 10 and 20 points in the last 30 years. It’s important to break this problem into two separate parts: the registration rate among those who are eligible to vote, and turnout among the registered population. Identifying which is the bigger problem will help us know which problem to target first.

Compared to other states, California’s registration rate has been slipping. By contrast, turnout among the registered has been consistently higher than in other states, and has been holding up better over time. These numbers are not yet available for 2014, and California’s turnout will likely be low relative to other states that year. But overall, California lags other states in registration, not turnout.

That’s not to say that turnout among the registered is without problems. It has been declining in absolute terms, at least outside of fall presidential elections. But if we are going to tackle one problem in particular, registration may be a good place to start. In addition to being a problem more specific to California, it may be more amenable to broad reform. It amounts to little more than an administrative hurdle, and as detailed below, it is certainly the easiest one to take permanently off the table through more sophisticated data management.

What are some of the reforms that have been tried in the past, and how well have they worked?

In a report last year, I explored the effect on turnout and registration of two reforms to the registration process that California recently adopted to make the process easier. The first was online registration, which allows voters to conduct the entire registration process online without ever needing to mail in a paper form. The second is conditional registration, which allows voters to register and vote simultaneously in a single trip to the county registrar, and to do so after the official close of registration, up to and including Election Day. Online registration was used for the first time in the middle of the 2012 campaign season, so my analysis was about evaluating a reform that had already been implemented. Conditional registration, on the other hand, will probably not be implemented until 2017, so my analysis was about examining the effect of similar reforms in other states.

Online registration was wildly popular, accounting for over half the new registrants in the last month of the 2012 fall registration period. However, the results of the analysis of online registration suggested that the vast majority of these people likely would have registered to vote anyway. They probably got excited by the new system and registered earlier than they might have, but that didn’t significantly increase the total volume of registrations.

Conditional registration (often called “same day” or “Election Day” registration in other states) has been heavily used in the other states that have adopted it. There are often huge surges of use right before Election Day. As with online registration, however, almost all of these people would have registered anyway. The conditional registration system simply allowed them to register later. In terms of getting new voters to the polls, the policy has had more mixed results, with high-end estimates of an increase in turnout of about 4 percentage points.

The challenge for California is that even if all the users of conditional registration would have registered anyway, there will still be a lot of those people. That makes for a late surge in registrations that must be processed, and on a scale that other states have not faced. Elections are administered at the county level, and California has six of the 20 most populous counties in the country. Los Angeles County by itself is 40 percent larger than the largest state that has adopted a conditional registration system up to this point (Wisconsin). Thus, California will have to handle a significant portion of its conditional registrants through a small number of very large counties. The state needs to be prepared.

What are the other reforms that have yet to be tried?

Probably the biggest reform to registration that has not yet been tried in California is automatic registration. This is a system where voters who engage with government in some other capacity (usually by getting a drivers’ license at the DMV) and provide enough information to be registered are put on the voter rolls by default. They would then be given the option to remove themselves if they wanted but would otherwise remain registered.

Though automatic registration would be a big change, it is not quite as radical as it sounds. The state already tries to give residents the option to register at the DMV and other agencies (not always with perfect success), so automatic registration would just be a more insistent and systematic form of the same policy. Moreover, the drivers’ license and voter registration lists are on the verge of being linked already, thus easing many of the potential technical hurdles.

Would automatic registration solve California’s turnout problem? No, because low registration is about more than administrative hurdles. Many of the people who do not register are expressing a deeper disengagement from politics and public life. For example, North Dakota has no voter registration at all but falls far short of 100 percent turnout. Thus, automatic registration would need to be followed up with constant engagement to truly leverage the new system. What it would do is ensure that something closer to 100 percent of California citizens would be available for engagement without any further administrative steps along the way.

Automatic registration could also help the state deal with the surges of late registrants it will likely see under the conditional registration system. With voters added to the rolls throughout the year as they acquired or updated drivers’ licenses, there would be far fewer voters who would need to use the conditional registration system at the eleventh hour, making it more manageable for county registrars.

In the end, automatic registration is only one potential solution to voter turnout problems in California. Many others can and should be considered, and after all stakeholders have weighed in, an automatic registration itself may not prove to be the best fit for California. A bill proposing an automatic registration system has been introduced by Assemblywoman Lorena Gonzalez, so there will be a real opportunity to have a robust debate on the issue. That alone will be a healthy step forward for California.

Video: PPIC Statewide Survey Briefing

As discussions continue in Sacramento about drought relief, funding for higher education and transportation projects, and an extension of Proposition 30 tax increases, PPIC surveyed public opinion on these and many other topics. At a briefing last week in the capital, PPIC researcher Jui Shrestha provided the survey findings. Among the key points:

  • Two-thirds of Californians say the regional water supply is a big problem, and two-thirds say people in their part of the state are not doing enough to respond to the drought.
  • While most adults say that spending money on the maintenance of California roads, highways, and bridges is very important, there is little support for increasing the gasoline tax or vehicle registration fees to do so.
  • Half of Californians favor extending the Proposition 30 tax increases, and about a third favor making them permanent.

The Special Election and the Top-Two Primary

Two Democrats are heading into a runoff in a big political fight for a seat in the state senate, representing the wealthy bedroom communities of the far eastern Bay Area. The contenders are Susan Bonilla, a Concord assemblymember, and Steve Glazer, the mayor of Orinda. The race was held under the rules of California’s new top-two primary, but the role of this new system in producing the outcome is more complicated than it might seem.

Four Democrats and one Republican were on the ballot for this 7th Senate District seat, which became vacant when Democrat Mark DeSaulnier successfully ran for the U.S. House of Representatives. The race boiled down to a pitched battle between the three best-known Democrats: Joan Buchannan, a former Alamo assemblymember; Bonilla; and Glazer. The fourth Democrat received far less attention and the lone Republican actually withdrew from the race and endorsed Glazer (though her name remained on the ballot). At the time of this writing, Glazer has finished first with 33 percent, followed by Bonilla with 25 percent, and Buchannan with 23.

A goal of the new top-two system is to encourage candidates to build centrist cross-party coalitions. All candidates were on the same ballot, and voters could choose any candidate they liked, regardless of party. The top two vote getters, also regardless of party, now advance to a runoff campaign. (Technically, this special election uses a variant of the top two, in which a runoff occurs only if none of the candidates receives at least 50% of the vote. But that did not end up being a factor in this race.)

Steve Glazer fits well in this new system. He has taken a more business-oriented perspective that has put him at odds with many in the party’s pro-union establishment. With the endorsement of the only Republican in the race, he has been empowered to draw Republican voters to his banner. Moreover, the 7th Senate district is in an area with politics only slightly left of center, with more Republican voters than is typical for the Bay Area. As if that weren’t enough, counts of vote-by-mail ballots just before Election Day suggested Republicans were turning out to vote in disproportionate numbers, making them even more critical to the outcome.

However, it is important to emphasize the precise way in which the top two impacts this race. The open ballot—with all candidates listed regardless of party—is not new to special elections such as this one. Special elections have long had an open ballot, so even before the reform the District 7 candidates would have been free to reach across party lines.

The key difference comes now that the first round is over. Under the old special election system, the top vote-getters within each party would advance to a runoff election. Under the new system, the top two candidates advance even if these candidates hail from the same party. Thus, the May match-up between Glazer and Bonilla would have been impossible before the top two.

The irony is that in this particular case, the same-party race has thrown an extra hurdle in the way of the more moderate candidate. Under the old system, Glazer would have advanced to a runoff against a Republican who is no longer in the race. Now he must fight another Democrat to secure his place in the legislature.

But that doesn’t mean the top two has necessarily hurt Glazer’s chances. The same candidates may not have made the same decisions under the old system. Michaela Hertle, the Republican, might not have withdrawn from the race and endorsed a Democrat, because as the only Republican, she would have been guaranteed a spot in the runoff. Glazer might not have run for fear that he would not finish a clear first among all the Democrats. Though one can never be certain about any particular race, there is evidence that the top two has discouraged candidates like Hertle—those who hail from the major party with fewer registrants in a district—and encouraged more candidates from within the district’s dominant party. So while the top two didn’t enable cross-party coalitions in this race, it may have altered the landscape in other ways.

At any rate, there is no doubt that the top two has changed the contest moving forward, since Glazer and Bonilla never would have faced each other in the runoff without it. The ultimate test of the system lies with the outcome of this same-party race, and the political leanings of the person who wins it.

Can Preregistering Teens Boost Voter Turnout?

California has been struggling lately with voter engagement. Turnout in the 2014 statewide elections, both in the primary and the general, set record lows. Turnout among young voters was especially bad. A recent report from Mindy Romero of the California Civic Engagement Project showed that an abysmal 8% of 18 to 24 year olds cast a ballot in 2014. As Paul Mitchell of Political Data Inc. dryly noted, “In California, an 18- or 19-year-old was more likely to be arrested this year than actually vote in one of the statewide elections.”

In this environment, California has been exploring and adopting all sorts of policy changes to improve turnout. One of these is preregistration: the practice of allowing voters who are not yet old enough to vote to place a flag in the system that will activate their registration as soon as they come of age. California has had preregistration for 17-year-olds since 2009, and for 16-year-olds since last year. However, neither reform will go into effect until the state completes work on a new voter registration database in 2016.

Most of the conversation around this reform has focused on making it easier to get more young people registered by expanding the window of opportunity for doing so. Yet interesting new research suggests there may be more to the reform than meets the eye.

In a recent paper in the prestigious American Journal of Political Science, John Holbein and Sunshine Hillygus of Duke University find that young people who enter the voter rolls through preregistration vote at higher rates than young people who register the traditional way. Depending on how it is measured, the boost in youth turnout is anywhere from a modest 2% to a whopping 13%. While theirs is not the first research to suggest an impact from preregistration (see, for example, this report by Michael McDonald of the University of Florida), Holbein and Hillygus go to great lengths to isolate the causal impact of the reform itself. Thus, we can be pretty confident that the effect they find is real.

This is a very intriguing result. It suggests that there is something about the act of preregistration that makes young people more likely to follow through and cast a ballot. Even more amazing, the boost in turnout measured by Holbein and Hillygus came years after the young people first signed up.

What could be producing this effect? Though the authors can’t say for sure, they speculate that it may have something to do with the way young people participate in the preregistration program. Preregistration often occurs at special school events where there is a certain fanfare around the process. Such fanfare is likely to impact teenagers with extra force, since they are actively shaping their own political identities. In other words, this paper may tell us as much about the potential benefits of civic education in high school as it does about preregistration itself.

More generally, the research also reminds us that total turnout is not a good way of assessing the performance of reforms. California’s turnout has been horrible lately, and any single reform is not likely to alter that basic truth. But if we can identify reforms that improve matters at the margins, then enough of them might add up to a more substantial effect.

A Move to Raise Turnout in LA

Turnout in the most recent Los Angeles City Council election was almost impossibly low: slightly less than 9% of registered voters, or about 150,000, cast ballots. Governance of a city of almost four million was in the hands a group that could squeeze into the Rose Bowl.

And yet this same select club did something on Election Day that all but guaranteed their membership will grow. The days of the “Rose Bowl electorate” are numbered.

LA City Council races fall in the spring of odd-numbered years and don’t coincide with state and federal elections. The City Council races also have voter turnout that is 20 or 30% lower than in state and federal races in neighboring years. The explanation for the difference is not complicated. Visibility and excitement are powerful drivers of turnout. Elections that receive attention across multiple media outlets—such as those for Congress and the presidency—create a buzz that voters find harder to ignore. To expect a similar buzz for stand-alone local races is to require a volume of coverage that those races almost never receive.

What makes the most recent City Council election so unusual is that two extraordinary measures, City Charter Amendments 1 and 2, were also on the ballot. They proposed moving City Council and school district elections to coincide with the federal and state elections that draw more voters to the polls. Even more amazing, the small, dedicated group who voted on these measures passed them by a 3-1 margin, effectively taking a step to end their own privileged position in city and school district politics.

Will this actually increase participation in these local races, or will voters get “ballot fatigue” and opt out when they get to the end of longer ballots? In a 2002 Public Policy Institute of California report, Zoltan Hajnal, Paul Lewis, and Hugh Louch concluded that about half the difference between local and federal turnout can be attributed to election timing. That suggests that the timing change will prompt most voters to weigh in on local elections, even if they are drawn to the polls by higher profile congressional or presidential contests.

The problem of low turnout in LA will not be solved by this policy change. There are clearly other factors driving turnout down, factors that consistently place LA County near the bottom of the turnout list in all elections. But in passing Charter Amendments 1 and 2, voters in LA have taken an important step toward encouraging higher participation in city elections, one that deserves serious consideration by other cities as well.

Video: January PPIC Statewide Survey Briefing

State residents are feeling more optimistic than they have in years—about California’s elected leaders, the direction of the state, and their own economic futures. Dean Bonner, associate survey director, presented these and other key findings at a briefing last week in Sacramento. In addition to asking about government and fiscal issues, the January survey gauged opinions on four important issues being debated at the state and federal level. Among the findings:

  • Crime, police, and race relations. A solid majority of Californians say the police are doing either an excellent job or good job controlling crime in their communities. But blacks are much less likely than others to hold this view.

  • Water and drought. A majority of Californians say the supply of water is a big problem in their region, and most say the state and local governments are not doing enough to respond to the current drought.

  • Health care reform. A record-high 51 percent of Californians have a generally favorable view of the 2010 health care reform law, while 41 percent have an unfavorable view.

  • Immigration reform. A solid majority of residents support President Obama’s executive action to shield as many as 4 million immigrants from deportation, while about a third are opposed.

The Debate Over Extending Proposition 30

One of the most controversial issues that the governor and legislature face in 2015 is what to do about the Proposition 30 tax increase. This citizens’ initiative passed with a 55% yes vote in November 2012. The governor says this tax increase is meant to be temporary. But others say that the state budget situation has improved because of Proposition 30, and it could deteriorate if we allow the sales and income tax increases to fully expire in 2018. In the most recent PPIC Statewide Survey, 52% of likely voters would favor a Proposition 30 tax extension. We found identical results in our December 2014 poll. A slim majority of support suggests that a tax extension is in the realm of the possible but far from a sure thing.

Why the sense of urgency? Tax proponents say that the November 2016 presidential election offers the last chance for a high turnout among voters who are likely to support a Proposition 30 tax extension before its sunset in 2018. Our most recent poll confirms this view. Support for the tax extension falls short among the likely voter groups with the highest propensity to vote: Republicans (30%), whites (49%), homeowners (48%), age 55 and older (50%), and those with annual incomes of $80,000 or more (45%). Support is highest among these lower-propensity likely voter groups: Democrats (69%), Latinos (68%), those under age 35 (61%), renters (61%), and those with annual incomes under $40,000 (59%). As these numbers suggest, it would be a riskier proposition to wait until the 2018 gubernatorial election for a tax extension vote.

Many observers think that the voters will take their cues from Governor Brown if they are asked to weigh in on this issue. After all, it was the governor who brought this tax measure to the voters when the legislature failed to act. In our latest poll, most likely voters—58%— approve of the governor’s job performance, and most who approve of Brown also favor a tax extension (69%). Also, those who prefer Governor Brown’s approach to the state budget over their Democratic and Republican legislators overwhelmingly favor a tax extension (75%). In sum, Brown’s position on the tax extension will matter. But no one is certain whether he will actively support or openly oppose a tax extension in 2016.

Some are looking to tweak the current Proposition 30 tax increase to gain more favor with the voters. There are calls, for example, for the creation of another temporary tax increase instead of making the Proposition 30 increases permanent. That may help gain voter support, but we have no PPIC polling data suggesting that voters supported Proposition 30 because it was temporary. Others argue that the tax on earnings over $250,000 should continue while the one quarter cent sales tax is allowed to expire. This might well improve the chances of passage and is consistent with our past polls, which show majority support for raising taxes on wealthy Californians and majority opposition to a state sales tax increase.

What is missing from this political calculus? A selling point of the Proposition 30 tax increase was its beneficiary: K-12 education. In our past polling, Californians have ranked K-12 education as their highest spending priority. However, relatively few (correctly) perceive that K-12 education is now the largest area of state spending.

Our recent poll shows that the knowledge gap is wide when it comes to the state budget: 57% of likely voters say that K-12 education is their highest priority for state spending, but just 19% are able to cite K-12 education as the largest area for state spending today. Among the likely voters whose top spending priority is K-12 education, 54% are in favor of a tax extension. Among those who think the state’s top spending category is something other than K-12 education, 56% are in favor of a tax extension. But among those who accurately say that K-12 education is the state’s top spending area, just 35% favor extending Proposition 30.

Our survey also asked what is the one issue facing California today that is most important for the governor and legislature to work on this year. Among the likely voters who named K-12 education, 65% are in favor of a Proposition 30 tax extension. In sum, the fate of a Proposition 30 tax extension in 2016, as was the case for Proposition 30 in 2012, will likely depend on how the voters perceive its effects on K-12 education.

The November 2016 presidential election offers the best chance to include the most voters in this contentious issue. And, as our recent poll shows, Californians want a role in fiscal decisionmaking. An overwhelming 76% of likely voters say they prefer that voters make some of the decisions about spending and taxes at the ballot box, while just 21% say that they want the governor and legislature to make all of these decisions. Why not give the voters a chance to hear the pros and cons in a debate that can also help increase knowledge about the budget and give them the role they want to determine California’s future?