Populism and Policy
This year's ballot in California once again illuminates how poorly the initiative process serves the cause of good governance. In going through the annual ritual of trying to decipher just what all of these initiatives mean, the question I found myself asking over and over again is 'is this good policy.' The answer, regrettably, was generally either 'no' or 'who can tell?' Given last year's widely followed public lynching of our sitting governor, who was replaced by a charismatic but politically ignorant movie star, one would have hoped that finally the electorate was ready to confront their own role in creating the mess for which Gray Davis was blamed. Sadly, but predictably, rather than introspection we see a renewed rush to inflict false populism's short-sightedness on the state government.
For those who missed the substance in last year's recall fiasco here in California, one of the major complaints against Gray Davis was his mismanagement of the state budget. While Davis deserved to be publicly trashed over his pandering to special interests, on the budget matter he got a bit of a raw deal. The sad truth here in California is that the major impediment to a rational budget process is the zeal with which the electorate passes initiatives that earmark spending. While the initiatives are frequently for good causes for which it is easy to muster widespread support, that does not excuse the hash they make of policy. Rather than encouraging citizens to better understand the give and take of government, the initiative process perpetuates the public fantasy of a free lunch. I have yet to see an initiative that has any approach to paying for itself which actually encourages voters to weigh the benefits of the proposal against anything.
A perfect example of this is this year's 'tax the rich' proposal. This is an initiative that proposes a 1% surcharge on any income over $1,000,000. The money is explicitly earmarked to fund an expansion in mental health care. The clear question that should be asked here is whether, assuming that such a surcharge is to be put in place, this is the best way to spend the money. Of course that isn't a question one is encouraged to ask. One can vote yes or no, not yes but.... Over the years this ad hoc process has become the primary way in which the state budget is crafted. I believe that somewhere around 90% of the entire budget is controlled by past initiatives stipulating specific funding targets or percentages. And of course other initiatives have hobbled the state's ability to generate new revenue. The people are right to be angry about the mess that this has made of California's fiscal process, but they are wrong to be directing that anger anywhere but at themselves.
As a footnote to this, the estimates that accompany the above-mentioned initiative state that they expect to raise around $850,000,000 a year through this surcharge. That means the very wealthiest of Californians are pulling in $85 billion a year. One would like to know how much of that is actually paid back in taxes.
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