Monday, May 25, 2009

Because it bears repeating

There is something structurally dysfunctional about California's political system. I've said it before, and will say it again, with a little help from Paul Krugman:

What’s really alarming about California, however, is the political system’s inability to rise to the occasion.

Despite the economic slump, despite irresponsible policies that have doubled the state’s debt burden since Arnold Schwarzenegger became governor, California has immense human and financial resources. It should not be in fiscal crisis; it should not be on the verge of cutting essential public services and denying health coverage to almost a million children. But it is — and you have to wonder if California’s political paralysis foreshadows the future of the nation as a whole.

The seeds of California’s current crisis were planted more than 30 years ago, when voters overwhelmingly passed Proposition 13, a ballot measure that placed the state’s budget in a straitjacket. Property tax rates were capped, and homeowners were shielded from increases in their tax assessments even as the value of their homes rose.

The result was a tax system that is both inequitable and unstable. It’s inequitable because older homeowners often pay far less property tax than their younger neighbors. It’s unstable because limits on property taxation have forced California to rely more heavily than other states on income taxes, which fall steeply during recessions.

Even more important, however, Proposition 13 made it extremely hard to raise taxes, even in emergencies: no state tax rate may be increased without a two-thirds majority in both houses of the State Legislature. And this provision has interacted disastrously with state political trends.

For California, where the Republicans began their transformation from the party of Eisenhower to the party of Reagan, is also the place where they began their next transformation, into the party of Rush Limbaugh. As the political tide has turned against California Republicans, the party’s remaining members have become ever more extreme, ever less interested in the actual business of governing.

And while the party’s growing extremism condemns it to seemingly permanent minority status — Mr. Schwarzenegger was and is sui generis — the Republican rump retains enough seats in the Legislature to block any responsible action in the face of the fiscal crisis.
As I was noting back in February:
I always thought that the way the state's budget was voted on was very dysfunctional under the best of times. Budgets rarely get passed before the fiscal deadline, and God help anyone who proposes even a minimal tax increase. When times are hard, the proceeding get downright surreal. The requirement of a supermajority to pass any sort of tax increase effectively grinds everything down to a halt. Seriously - from what I can gather, the state's government is in some sort of paralysis. In the meantime, while California burns (figuratively) the last of the anti-tax brigade fiddle.

All I can say is good luck to anyone there who is a state employee or requires any of that state's services. While you're surviving the impotence of legislators and the governor, this would be a really good time to demand some major reforms to the legislative process with a particular eye to overhauling the budget process.
I'm not sure what sorts of options are really viable for California these days. Rolling back the damage done by Prop 13 and its successors will probably have to be done via the one of the very processes that has fallen apart - namely the ballot initiative. For what remains of the GOP's true believers, I'd pretty much write off the idea of persuading them to try something sane - even though at this late date some modest tax increases could help enormously, the true believers will simply pretend not to hear you if you dare to mention that fact. Instead the true believers undoubtedly view the current crisis as the answer to all their prayers (i.e., a state with a government existing in name only, in which such horrible afflictions such as functioning roads, schools, universities, and other public services are abolished once and for all). Howard Jarvis' and Paul Gann's "paradise" has finally arrived. Too bad their paradise amounts to the creation of a banana republic.

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