March 25, 2004

Orange County Residents’ Views About State Budget, Taxes and Spending

Budget hearings mark the days of legislators in Sacramento in this season. The March 2 election is history; Props 57 and 58 were approved by voters; Proposition 56 lost big. We await the May revision of revenue estimates (the “May Revise”), which kicks off the period of intense work on the state budget. Yet we know, or think we know, that an important part of the exercise this year will involve making cuts to the budget.

In the latest CSUF – OCBC survey, we asked residents of Orange County for their views and priorities for the state budget. We began by assessing their sense of the importance of the state budget deficit, asking this question:

As you may know, the state government currently faces a multibillion dollar gap between state spending and state revenue. Do you think that this deficit is not a problem, somewhat a problem, or a big problem for the people of California today?

As reflected in Table One, more than eight out of ten respondents thought the deficit “a big problem.”

We went on to ask about preferred methods for dealing with the problem, asking the following question:

How would you prefer to deal with the state’s multibillion dollar gap between state spending and state revenue: mostly through spending cuts, mostly through tax increases, through a mix of spending cuts and tax increases, OR do you think that it is okay for the state to borrow money and run a budget deficit?

As shown in Table Two, spending cuts together with a “mix of spending cuts and tax increases” were about equally favored by our respondents.

When we reviewed the preferred ways to deal with the state’s budget gap by respondent’s political party registration, we found an expected result. Among respondents who told us that they were registered Republicans, 57% chose “mostly spending cuts.” That option was chosen by 30% of respondents who told us that they were registered Democrats.

Meanwhile, 54% of Democrats chose “through a mix of spending cuts and tax increases,” an option that 32% of Republicans said they preferred.

With spending cuts clearly on the table, then, it is appropriate to ask just what Orange County respondents would like to see cut. We posed major areas of state spending to respondents and asked the following question:

Now I want to list some areas that might be cut in order to balance the state budget. For each area, would you support cutting the budget a lot, cutting the budget somewhat, or not cutting the budget at all?

The areas we posed are shown in Table Three. The list was rotated, which means that the items had an equal number of times to be asked first in the order, to be asked second, etc.

As we detail in Table Four, the area that respondents were least anxious to cut was “Schools, kindergarten through high school.” The area they were most ready to cut was “The governor and the executive branch budget.”

“Schools continue to be first in the hearts of the taxpayers,” noted Keith Boyum, director of the Center for Public Policy and CSUF Professor of Political Science. “The policy-makers in Sacramento continue to be the last priority, with the courts doing better than the legislature and the governor. That result is entirely familiar from many previous studies in political science: judges win some esteem but in these numbers, not much budget priority, as legislators and often executives win scorn.”

“The vulnerable appear also to touch a soft spot in the hearts of county respondents,” commented Phillip Gianos, CSUF Professor of Political Science. “The aged, blind, poor, elderly, ill and disabled lead some familiar programs like local government aid and public universities.”

“The public would be pleased to cut those areas of the budget where the money is not,” said Boyum. “Taken together, the budgets for the courts, the legislature and the governor and executive branch may add up to 4% of the general fund. If we whacked them 25%, which would be a devastating cut, it would amount to less than 1% of the general fund, or perhaps three-quarters of a billion dollars. While that may be a down payment in some people’s minds, it won’t close a budget gap that’s estimated at $12 billion or more. And no dispassionate observer would agree that the need devastating cuts is due to the policy-makers in state government anyway.

“Meanwhile,” Boyum continued, “the public does not wish to cut areas where the money is in fact allocated. Seven out of ten respondents don’t want K-12 education cut at all. Yet just the portion of the budget for kindergarten through high school mandated by Proposition 98 amounts to 37% of the general fund, according to the Legislative Analyst’s review of Governor Schwarzenegger’s January budget proposal. (It’s actually nearer to 40% of state spending by other calculations, when additional non-Proposition 98 spending is taken into account.)”

“Then there is the spending on behalf of the aged, blind, poor, elderly, ill and disabled,” Gianos remarked. “In rough terms, spending on these programs amounts to a quarter of the general fund. Yet more than half of our respondents would wish this portion of the budget not to be cut at all.”
“In the end, we find respondents who are not anxious for tax hikes, and not favoring continuing deficits – but still not wanting most cuts to fall where most money is to be found,” concluded Boyum.

Reviewing these results, Stan Oftelie, president and CEO of the Orange County Business Council, commented:

“The case has been made that California has a budget problem, but no one has defined a clear path to a solution. Right or wrong, people don’t think they are getting their money’s worth from government, so they want politicians to keep delivering services with the tax money available. Most government officials say that is impossible. That mixture – a reluctant public and an entrenched state government – is a surefire recipe for legislative gridlock on California’s budget.

“The Governor has shown a remarkable ability to sell workable solutions to complex problems. But, right now, the public doesn’t see any solution in sight, and they don’t have any new ideas to offer.”

Previous results of CSUF/OCBC quarterly surveys are conveniently accessible on the OCBC web site. See: http://www.ocbc.org/resourcesf.htm

The current survey was conducted for the CSUF Center for Public Policy / Orange County Business Council team by the Social Science Research Center at California State University, Fullerton (SSRC). The SSRC Director is Dr. Gregory Robinson.

Telephone interviews were conducted utilizing Computer Assisted Telephone Interviewing (CATI) equipment and software. The CATI system is a sophisticated information-gathering protocol that contributes to the accuracy of data and to preserving the random nature of the sample.

A draft survey instrument was provided by the Center for Public Policy and refined by the SSRC for comprehensiveness, flow, length and factors that influence respondent cooperation and interest. Sample design and technical assistance with data analysis was provided by the SSRC.

The survey of Orange County residents took place between Feb. 4 and Feb. 22, 2004. Four hundred sixty-five randomly selected households are represented in the data. Interviews were conducted in English only.

Calculated conservatively, the confidence interval for findings noted is plus / minus 4.64 per cent. Confidence intervals around subgroups within the sample are broader.