Audio: Tim Hodson discusses the state budget. (30:00)

The State Hornet sat down with Tim Hodson, executive director of the Center for California Studies at Sacramento State, to discuss the state’s budget crisis and some solutions to the problems our state is facing. Hodson received his doctorate in political science from the University of California, Santa Barbara. He worked as a staffer in the California State Senate for many years. While there, he was key in passing legislative ethics measures and the 1991 Senate redistricting. Hodson is the co-director of the annual Legislative Staff Management Institute. He is the author of a number of articles on California government and politics and is regularly quoted on these issues in the national and international press, including the Los Angeles Times, The New York Times and the London Times.

State Hornet: How bad is California’s budget crisis in a historical context?

Tim Hodson: In a historical and national context, it’s very bad but it’s not the worst. In fact, there are three other states right now that have worse budget problems, including Nevada, Arizona and New York, which is interesting because that’s not talked about in California. As a percentage of the general fund we had a worse deficit in the early ’90s.

Having said that, we are having very serious problems today for a variety of reasons. First and foremost, the entire country is in economic distress. For a variety of reasons, California is probably going to recover slower than many other states. But we also, in terms of California, we are reaping the results of 30 years of bad policies, going back to 1978 and the enactment of Proposition 13. So we are in a very tough situation. It’s not hopeless, but it’s a tough situation.

SH: You spent many years working at the state Capitol. Right now, we are seeing a serious ideological wall between the two parties. Is this a relatively new phenomenon or is this something you’ve seen before? And how much a part of the problem is this?

Hodson: It is a new phenomenon, but again put it in the context – it’s not unique to California. If you don’t have partisan gridlock in the United States Congress, what the hell do you have? It is worse now than it used to be. When I first went to work for the Legislature in 1978 there were moderate Republicans and moderate Democrats.

What’s happened in California and nationally, and this is particularly true – and I am not trying to be partisan – the studies have shown clearly that the Republican Party is more homogeneous in its ideology. It is more conservative, and Republican members tend to be grouped around a particular ideology without as much ideological diversity as the Democrats. The Democrats have moved to the left a bit, but the Democratic Party still has moderate to conservative Democrats. So it is much more difficult to try to come together with compromises when there is such an ideological gulf.

SH: The majority of Republicans in our Legislature have signed Grover Norquist’s “No New Taxes” pledge. When we’re facing this big of a budget deficit is it realistic or feasible to go with the cuts-only approach to get us out of this problem?

Hodson: Well, interesting, is it feasible? We have a constitutional structure that requires a two-thirds vote to increase taxes, a two-thirds vote to pass a budget. As the framers pointed out in “The Federalist Papers” anytime you have a super majority requirement you are in essence empowering the minority and giving them more power than the majority. And that is exactly what has happened for several years in California. Budgets are passed to buy off, appease and satisfy the Republican caucus even though they’re the minority. As a result, there are Democrats who feel they haven’t had a Democratic budget in years.

The February budget included new taxes. I think it’s very telling that the Senate Republican leader was literally removed from his position in a midnight coup. That shows the Republican caucus is fairly firm in saying, “We will not support new taxes.”

The interesting thing is if you look at the willingness of Californians to vote for taxes, the poll data clearly shows the majority of people in California are willing to increase taxes. And more importantly than poll data, if you look at election results at the local level, Californians vote for more tax measures than they vote against. Let me give you a good example, voters in Long Beach specifically enacted an oil severance tax. It’s a city tax. That has been declared off the table by both the Republicans and Gov. Schwarzenegger at the state level. But the people of Long Beach were perfectly willing to do it two years ago.

SH: Is the two-thirds requirement to pass the budget and to raise taxes the biggest hurdle we’re seeing in getting better budgets and getting these budgets done on time?

Hodson: I think it’s one of the two. If you had, like 47 other states, a majority-vote budget what would happen is the Democrats, the majority party, would enact a budget. The governor, if it was a Republican, would say, “I don’t like that budget,” and then the Republican could veto the entire thing or use the line-item veto. The Democrats would know they would never get the two-thirds to override the veto. So they would be forced to negotiate with the governor. There would be balance there. If it wasn’t for the two-thirds vote, majority budgets would pass and would be passed sooner. A majority vote would make things accountable; it would make it clear it’s the Democrats who just passed this. If you like the budget praise them; if you don’t like the budget it’s their fault.

The second thing is the tax structure. Prop. 13 is the third rail. Not many people understand that property taxes on commercial property have been unchanged. The Disney Corporation pays essentially the same taxes on Disneyland that it did in 1978.

SH: How much of the huge cuts we’ve seen go through this summer lie at the feet of the voters for rejecting the ballot propositions in the May 19 special election?

Hodson: It complicated things. I’ve heard different estimates, but the lowest one is $1 billion this year that had to be found, because of the rejection of the Lottery Initiative. More importantly is the out years where some of the tax increases that were achieved are going to end earlier than had Prop. 1A passed. It made a complicated situation even worse.

SH: When we see such massive cuts to education, both the K-14 system, which includes the community colleges, and the CSU and UC systems, how do they recover from that?

Hodson: It will take years and a booming economy. It’s not going to be easy. One of the things that made California great was a commitment the people in the government made in the early 1960s with the Master Plan. The commitment was that there would be a community college, a CSU or a UC within an hour’s drive of every Californian and that it would be affordable. The CSU always had the policy that if you had the grades you could get in. That’s over now. In effect the CSU now has an admission policy like the UC. We’re turning people down. It’s going to take a long time, if ever, to get back to it.

Some of the changes may be OK. There has been a steady, increase in the number of units you need to graduate in your major. Is it really necessary to have that many units? Can you roll that back a bit and drop the number of required classes and maybe it’s easier to get through in four or five years? Budget cuts may force some departments to start thinking about that.

SH: Last summer there was a group calling for a state constitutional convention and over the past year that movement has grown. Would a constitutional convention and restructuring the way we govern California help with these kinds of budget problems?

Hodson: Restructuring is essential. Whether it can be done by a convention is an open question. If you make a list of the five or six most important changes in the California Constitution since 1879, none of them have been the result of a convention. They’ve all been the result of initiatives or amendments put on the ballot by the Legislature. There are serious questions about a convention. How do you guarantee that convention delegates look like California? The statewide electorate is white, conservative, older and affluent. The population is diverse, younger and less affluent and more liberal.

The second major issue about a convention is: How do you control it? Convention proponents say there is no question that you can have a convention called for a limited purpose. And that’s absolutely true. What they don’t address, which needs to be addressed, is the other half of that. You can call a convention to deal with A, B and C. Once a convention is convened and the delegates decide they are going to take on D, E, F and G, what’s to prevent them from doing that? The case law is old and thin, but fairly conclusive that once a convention is in session it can do anything it damn well wants. Of course the mother of all precedents is the Federal Constitutional Convention of 1787. It was convened and told explicitly it was not to develop a new constitution.

My personal concern is that it runs away, it stalemates, and whatever come out of it is defeated at the polls. Then we’re sort of worse off than we are.

Todd Wilson can be reached at [email protected].