We're stuck in 1978. That's the conclusion I reached last week, when I poured through documents and letters in Gov. Jerry Brown's archives.
In the weeks after Prop 13 passed in 1978, Brown got plenty of advice from the public. Californians deluged Brown with letters and telegrams (yes, telegrams!), thousands and thousands of them. One theme stood out: Thirty years later, we're still having the same conversations and the same debates. The thinking of Californians about their budget hasn't changed in three decades.
A couple weeks ago I began wading through boxes of papers from Brown's first governorship, which ran from 1975 to 1983. The papers are housed in a library at USC. I made a request last summer for access and complained publicly when I didn't get a timely answer. Like all former governors, Brown can restrict access to his papers for at least 50 years after he leaves office, but he granted me access earlier this year. So far, I've been looking through about 20 boxes, mostly Brown's personal correspondence, both incoming and outgoing.
I started with the letters from 1978, because that's the year that Prop 13 passed. Prop 13's effects, its merits and disadvantages, have been long debated, but what's clear is that the measure, by making it harder to raise taxes and centralizing governing power in Sacramento, changed how California was governed.
At the time, Prop 13 appeared to be a catastrophe. With one vote, Californians took an estimated $7 billion out of the budget. The immediate deficit created by Prop 13 could be mostly covered by a big state budget surplus. The question Brown faced in the summer of 1978 was: What to do long-term?
Brown received hundreds of letters in the days and weeks after Prop 13 from California residents. They offered solutions that sound similar today:
- Fire state workers, cut salaries or do something about pensions to balance the budget in the long-term.
(In fact, while such actions would make an impact -- then and now -- they're not nearly enough to do the job.)
- Make up tax revenue by cracking down on welfare fraud.
(Welfare, however, was and still is a tiny part of the budget.)
- "Kick out the Mexican aliens."
(This idea is both unworkable and, as a budget solution, ineffective.)
- A variety of tax increases to close the gap createed by Prop 13. Some suggested a measure on the very next statewide ballot, in November 1978, to take away the Prop 13 tax break for commercial property owners while leaving in place the new protections for homeowners.
(That idea, known as the split roll, has been proposed over and over for 30 years to no avail.)
- From a lawyer in Chino in a June 14, 1978 letter: "Dear Governor Brown: Licensing and taxing the cultivation and sale of marijuana would replace all of the revenue lost thorugh the Jarvis-Gann law."
(Californians will vote on just such an initiative in November 2010.)
What did Brown do? He and the legislature used the surplus to bail out local governments and school districts -- and in the process gave the state decision-making power that once had belonged to locals.
A handful of letter-writers argued against this, saying the state should let people feel the pain of the Prop 13 decision. From a Southern California woman on June 14:
"I have one suggestion to make: Not one cent of the much-publicized state surplus revenues should go to cushion the shock from the drastic property-tax reduction: It should all be returned to the taxpayers next year in the form of lower state taxes. Give it all back, and say: 'Enjoy!....' The middle class in California, who voted overwhelmingly for this initiative, needs to be taught a lesson in responsibility. The apathetic lower class, who failed to effectively opposed this initaitve, also needs to be taught a lesson: That they can't just sit on their asses and let the overstuffed middle class get away with this nonsense."
This seemed unbelievably harsh -- the damage to local services and school districts would have been considerable -- but with the benefit of hindsight, it actually sounds right.
The state bailout was inevitable. Politicians in an election year aren't going to visit serious pain on voters if they can help it. And the voters were demanding, albeit unrealistically, the same level of services while paying less in taxes.
But the relief Brown and legislators provided by using the 1978 surplus to bailout local governments and school districts was temporary. Three decades later, we're feeling serious budget pain and still looking for a cure.