PPIC's New Statewide Poll Shows a Gloomy California Populace -- California Capitol Hill Bulletin -- Volume 10, Bulletin 4 -- February 27, 2003

Saying that "It's beginning to look a lot like 1994," the Public Policy Institute of California (PPIC) released a new statewide survey on February 25, 2003, indicating that Californians are in a dark mood and very pessimistic regarding the state's economy. In addition, the survey indicates that residents' concerns about the state budget crisis do not translate to willingness to help the state balance its books through personal sacrifices.

According to PPIC, Californians by a wide margin say the economy and jobs (28%) are the biggest problems facing the state, followed by the state budget and taxes (15%), education and schools (11%), and war and terrorism (10%). An overwhelming majority (71%) of state residents say they expect bad times financially in the coming year, compared to 47 percent February 2002. More Californians today (60%) than in November 2002 (47%) believe their region of the state is in an economic recession. Economic angst is also taking its toll on residents' overall perceptions of the state: 60 percent say California is headed in the wrong direction, while only 28 percent believe it is headed in the right direction. One year ago, 56 percent said the state was headed in the right direction.

"There is a great deal of concern and frustration out there," said survey director Mark Baldassare. "And Californians have never been shy about pointing fingers." Californians also apparently blame elected officials for the state's problems.

Nearly all Californians (95%) say that the state's budget deficit is a big problem (74%) or somewhat of a problem (21%). Most residents (91%) are also very concerned (63%) or somewhat concerned (28%) that the fiscal crisis will cause severe cuts in areas like education, health care, and the environment. Consistent with these priorities, half of Californians (52%) say K-12 education should be the top priority for state spending, followed by health and social services (25%), higher education (7%), roads and infrastructure (6%), and corrections, including prisons (2%).

Although more residents (43%) say they would prefer to deal with the state budget deficit through a mix of spending cuts and tax increases - rather than cuts alone (32%) or taxes alone (7%) - it is not clear what spending reductions would receive public support. Indeed, despite the budget crisis, majorities still believe the state government should spend more money on K-12 education (65%) and health and human services (52%). And few residents want to see less money spent on any state program, including K-12 education (5%), public health (12%), higher education (15%), roads and infrastructure (21%), and environmental protection (23%). In fact, corrections and prisons is also the only area where a significant number of state residents (42%) support a reduction in spending. In concept, however, residents like the idea of limiting spending: 52 percent say they would favor an amendment to the state constitution that limits spending increases.

However, Californians generally reject measures that would increase taxes, although they are more receptive to taxes that impact the few:

74 percent favor, 25 percent oppose: raising cigarette taxes

52 percent support, 42 percent oppose: reinstating the top rates on the state income tax

44 percent favor, 52 percent oppose: raising the state sales tax from 6 to 7 percent

The same appears to hold true for alternative revenue options being considered by the state legislature:

56 percent favor, 39 percent oppose: taxing all internet commerce

39 percent support, 58 percent oppose: reinstating the full vehicle license fee (VLF)

37 percent favor, 60 percent oppose: extending the sales tax to include services

22 percent favor, 76 percent oppose: raising fees at public colleges and universities

Overall, Californians are divided about whose approach they prefer in balancing the state budget: 33 percent say they support the approach of the Democrats in the state legislature, 30 percent support the Republican approach, and 13 percent favor the governor's plan. But the split is even more fundamental: While 49 percent of residents would pay higher taxes to support a government that provides more services, 45 percent would rather pay lower taxes for a smaller government providing fewer services.

Baldassare indicated that state voters are unlikely to make hard choices, stating "There is little consensus and even less will." And 25 years after Proposition 13, residents remain more positive (57%) than negative (21%) about it. While there is slim support for changing some elements of Proposition 13 -- 52 percent favor eliminating limits on property tax assessments for commercial property - Californians remain opposed (60%) to allowing local special taxes to pass with a simple majority.

Regarding federal taxes, half of state residents (50%) say they would prefer to have the federal government balance the budget instead of using the money to fund a tax cut, while 34 percent say they would take the tax reduction. State residents are divided about the fairness of the Administration's current tax reduction proposal: 47 percent say it is unfair to people like them, while 43 percent think it is fair. Nationally, 42 percent of Americans think the tax plan is unfair to people like them.

More information is available at http://www.ppic.org .

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