Paradise Lost

Summary:Because of cuts in property taxes and a reluctance by older, wealthier, white home owning Californians to pay for services they don't personally use; public services in California are underfunded. These public services are used by ethnic minorities whose population has mushroomed in the past thirty years. These minorities are not represented at the voting polls. The polls are dominated by the older, wealthier, white voters who strive to reduce their taxes. The split between the demographic profile of the voters and the users of services is a challenge to California's state finances. Abstract: The main themes:1) Tax revolt;2) Demographic forces behind tax revolt; and3) Anti government Prop movement.Tax Revolt.The California public sector went from being the Nation's envy in the sixties to becoming among the sorriest in the nineties. In the sixties, California ranked among the top state in per capita spending on schools, universities, and infrastructure. Now, California ranks near the bottom on all counts. This shift was due to the tax revolt started in 1978 by Prop 13. The passage of key propositions caused budget constraints. Prop 13 in 1978 reduced property taxes by 60%. It shrank cities revenues by 27%, counties by 40%, school districts by 46%. Prop 13 also limited the ability of local governments to raise funds. Any parcel tax to service new bond issuance to fund local services has to be approved by 2/3 of voters. Ever since California schools have been underfunded. The Gann's spending limit, Prop 4, passed in 1979 limited the growth in state and local spending to the % increase in population + inflation. But, school enrollment and inmate counts were rising faster than the general population. Prop 13 & 4 resulted in cuts in K-12 spending. Prop 98 passed in 1988, was to shore up school spending. It guarantees that K-14 spending be equal to 40% of the General Fund. But, a decade later school funding as a % of General Fund was lower than it was before Prop 98. Prop 98 became a cap for school funding.These propositions caused a shift away from direct taxation towards fees. New fees have been raised on real estate development, business licenses, utility services. Fees on real estate development represent up to $60,000 per home! With the passage of Prop 218 in 1996, this access to local revenues was curtailed. Prop 218 dictates that no local tax, or fee will be imposed without a vote of the affected citizen. Another impact of Prop 13 is the "fiscalization of land." Land zoning became driven towards shopping centers which generate sales tax. This fiscalization of land resulted in a slow growth of the housing stock. Demographic factors behind Tax Revolt. Demographic shifts have caused a disconnect between voters and the users of public services. Between the 70s and the 90s, whites decreased from 78% to 52% of the population. Meanwhile, non-Whites grew from 22% to 48% of the population due to migration from

In this book, Peter Schrag explores the forces that made California the "promised land" of the American postwar era, and the forces responsible for its decline. Schrag spends much time discussing the initiative process and is critical of these attempts to bypass legislative decision-making in favor of direct voting on proposals. While initiatives sound good in theory, they can have unintentional negative consequences. One of the initiatives Schrag spends much time on is the disastrous yet popular Proposition 13, passed in 1978. Schrag's discussion of the initiative, its backers Jarvis and Gann, and its unintended consequences are the best I've seen anywhere. It is a classic case of a proposal that seemed to be sincere (property tax reduction) in its aims, but it was utterly disastrous for the state. The education system was once one of the best, now it is one of the worst in the country. Libraries have closed because of lack of funding. California has now become "Mississippified" as a result of the lack of information and forethought of the voters.This is an indispensable book and a warning to people in other states to avoid making the same mistakes California voters did.

"Paradise Lost" is about California governance, but it has national implications and should not be dismissed as a regional book. The topic is governance by ballot initiative, and the impact of perhaps the most influential ballot initiative of them all, Proposition 13. Prop 13 was enacted in 1979 ostensibly to cap property taxes in California. The campaign for its passage was bankrolled by some eccentric conservative millionaires, and California has been trying to cope ever since its passage. Schrag's book exposes how the seemingly good idea was packaged and sold to a gullible public, how education and human service have suffered ever since, and how the state's tax system has become a Frankenstein Monster favoring long-term wealthy residents and strip malls over more mobile Californians and manufacturing firms. The strength of this book is its in-depth analysis of the history and impact of Prop 13. The focus on this one initiative is so great that the book is almost about it and not the mechanism by which it became law (the ballot initiative). But this approach is justified to illustrate Schrag's main point, that ballot initiatives are deceptive and make bad laws. An excellent compliment to this book is David Broder's "Democracy Derailed," which focuses more on the degree to which the ballot initiative industry has become dominated by monied interests. Together, these books paint a bleak picture of states, especially California, where so-called "direct democracy" is a regular part of governance.This particular form of governance is actually popular because it conveys the illusion of voter-control. Most Californians would never dream of eliminating the initiative option, despite the imposing cost of putting a measure on the ballot, the prohibitive length of ballots crammed with several (sometimes scores) of complicated, sometimes competing initiatives, or the confusing tactics by which individual measures are advocated or opposed. "Paradise Lost" will probably get more angry responses than converts from the Golden State, but it should serve as a cautionary tale for the rest of us.The only flaw to this book is that the transition between the general discussion and the case of Prop 13 is clunky. More examples should have been explored in the general discussion, and the mechanisms of the procedure should have been better explained. The implication that the means are not justified by the ends would leave James Madison wanting for a more principled defense of the representative government alternative. But on the whole, "Paradise Lost" is a strong contribution to a dialogue with few too participants.

Schrag's presentation goes far beyond an analysis of the dynamics of the initiative process, though his comments in that area are interesting enough. Schrag, however, points to deeper, and more ominous elements in the stew. One of his key points would be difficult to dispute: the voters in California (generally white, older) have a different make-up than the residents of California (increasingly people of color). Another of key points, that underlying the initiative process (and its concommitant erosion or avoidance of the republican form of government) is an incipient racist underpinning (see code word immigration) may be subject to question, but is certainly a welcome addition to the California discussion. One of the intriguing aspects of the book is its use of footnotes to carry the discussion. The real question isn't whether his discussion is well "documented," but rather how sound are the conclusions presented. A good read.

This book is an absolute Must anyone involved in any capacity who participates in developing or implementing public policy. It very much applies to California, but, there is certainly an abundance of "food for thought" for the rest of the Country as well . . .Facinating compilation of facts and seemingly neutral analyis of same, very thought-provoking!