Daily News Clips
Office of the Chancellor / Public Affairs
Monday, June 2, 2003
 

Sacramento Bee 6-1-03

Dan Walters: Unintended results of policy choices litter the landscape

 

The solitary thread of consistency in California's complex, dysfunctional, ironic -- and often just plain wacky -- politics is that they faithfully obey the law of unintended consequences.
Whether decreed by voters or enacted by officeholders, the major policies imposed on the state in recent decades, most of them touted as "reforms," have uniformly not only failed to accomplish their supposed goals, but also very often worsened the problems they purported to solve. A few of the pithier examples:

* Californians were told in 1966 that if they created a full-time, professional Legislature, the Capitol would become more responsive, more ethical and more efficient. Instead, the professional pols who took over made it more insular, more corrupt and less effective.
* The term limits that were adopted in 1990 to correct the abuses of professionalization created a Legislature that is chaotic, ineffectual to the point of irrelevance and (with aid from a self-serving redistricting scheme) dominated by partisan extremists.

* A decade ago, the Legislature "reformed" a workers' compensation system that was riddled with fraud and abuse and very burdensome to employers but poorly compensated workers with legitimate job-related illnesses and injuries. The system is, by any measure, worse today that it was before lawmakers tinkered with it.

* A few years later, the same legislator who wrote the work comp reform took it upon himself to "reform" utilities, touting his "reform" as one that would lower Californians' power bills. The poorly conceived and drafted legislation resulted in a crisis that cost business and residential power users tens of billions of dollars and left the state with even higher power rates. The politician, Steve Peace, is now the state budget director.

A full list would take a book-length treatise, but those examples demonstrate the point: Repeatedly, California's major political decisions have produced results that conflict sharply with expectations.

Perhaps the granddaddy of those decisions, in terms of long-term unintended consequences, is Proposition 13, the property tax limitation measure that California voters embraced 25 years ago this month.

The 25th birthday of Prop. 13 is saturated with irony, occurring as Gov. Gray Davis and lawmakers wrestle with the almost incalculable consequences of their foolish decision to squander a one-time income tax windfall three years ago and commit the state to spending many billions of dollars out of whack with income. And the crisis's roots are found in Prop. 13.

Davis and the Legislature could screw up so badly because Prop. 13 had the unintended effect of concentrating fiscal decision-making in Sacramento. As the state assumed a much larger burden of financing local services, it became increasingly dependent on one very volatile revenue source -- the personal income tax. An unanticipated spike in personal income taxes in 2000 -- largely due to the brief rise of the dot-com industry -- lured Davis and lawmakers into spending as if it would last forever.

One way out of the budget mess would be to raise taxes, but that option collides with another consequence of Prop. 13. The measure's chief guru, the late Howard Jarvis, said at the time that he was interested only in lowering property taxes and didn't care if sales or income taxes were boosted. But Prop. 13 quickly expanded into a full-blown "tax revolt" that reverberated around the nation. Opposing tax increases is now bedrock dogma among Republicans, who can control the issue because raising taxes requires two-thirds legislative votes, a margin also imposed by Prop. 13.

Local governments, meanwhile, found themselves relying more and more on sales taxes, leading to land-use policies that favor tax-producing commercial development and to the misuse of redevelopment as a retail subsidy tool. And local school politics often became dominated by unions as school boards lost their tax-setting powers and civic leaders lost interest.

Californians may have voted for Prop. 13 on the simple and not unreasonable notion that property taxes had gotten out of hand. But in California, nothing is simple, and generations yet unborn will be dealing with its unintended consequences.