Analysis: Results of Election Should Not Be Interpreted As A Tax Revolt

statecat.pngMany on the right have argued the results of this election should be interpreted as an extension of the Tea Parties that emerged in April and a revival of the tax revolt from the 1970s.  The problem with that interpretation is that many of the people who voted against the ballot propositions were actually political liberals who had a very different reason for voting against it.

An additional problem with this interpretation is that of the propositions, only Proposition 1A impacted taxes and even that only two years down the road and only to continue already implemented tax increases for an additional two years.

David Binder Research has put together a voter survey that demonstrates that contrary to the Governor’s statement that the propositions failed because the voters delivered a message to cut spending, the research shows something very different and interpreted altogether suggests that the Governor and Legislation ought not jump to conclusions about the results of this particular election.

The Binder survey is not a traditional exit poll, instead it polled 1,008 California voters from May 16 to May 20, 2009.  603 of those polled voted, an additional 405 did not.  The margin for error of this survey is 3.1%.

The electorate that voted in this special election did not look like the November 2008 electorate.  The voters in this election were more likely to be Republicans and less likely to be Independents.  Democratic voters came out in roughly their normal proportion.

Binder_1

“Of those that voted in this election, 43% were Democrats, 42% were Republicans and 15% were Independents or minor party voters. This past November, the electorate consisted of 46% Democrats, 32% Republicans and 22% Independents or minor party voters.

In November 2010, the electorate will be a group that is more supportive of the revenue options tested in the survey, and more strongly opposed to only using cuts to balance the state budget. While only 36% of voters that turned out for the May 19th election supported using entirely budget cuts to balance the budget, even fewer – only 24% — of non-voters felt the same way.”

One thing that the leaders and media appear to get right in their analysis is that the voters sent a message to the leadership of Sacramento to fix the problems themselves rather than rely on the voters to do it.

“Voters simply do not trust the leadership in Sacramento, and recognize that the failed special election was just another example of the inability to bring real solutions to voters.”

A full 74% said that the special election is simply another failure of the Governor and Legislature to do the job that they were elected to do.

“They need to stop going to the voters with political gimmicks and temporary fixes and instead make the hard decisions to really fix the budget.”

Only 20 percent believe that this was a sincere effort by both parties to gain approval of a compromise to fix the budget mess.

Binder_2

However, part of the failure of leadership is a structural problem in Sacramento that makes it difficult to pass budgets when one side is flat out refusing to compromise.  And while voters can say that they are frustrated at the leadership void in California and give Sacramento leaders of both parties lower ratings that their leaders in Washington, the question of political reform was not approached by Binder.  There is no question that examines the appetite to make structural changes, of which the two-thirds rule would be one of perhaps many options.

There is a movement to do a constitutional convention for example to re-write California’s constitution.  There are questions about term limits that need to be asked.  Questions about campaign reform.   Questions about redistricting.  None of these questions were asked by Binder and so we don’t get a full picture of what the people want in terms of change.

We do get a sense overall what they think of the legislature however, and some of these reform components can be inferred here.  The voters very clearly feel that the legislature is captured by special interests, cannot make the difficult decision, they are political and fight too much.  On the other hand, they are out of touch with the average voter, do not provide leadership or compromise, they are not accountable and not open and transparent.

Binder_3

What we do get a pretty good sense of is that this is not simply a tax revolt or a mandate to go on a cutting spree and cut vital programs.

Binder argues that the voters far from supporting a cuts-only solution, instead markedly support a valance approach.

“Voters want the Governor and legislature to stand up for solutions based on shared responsibility, instead of targeting average Californians. Voters feel strongly that special interests should be asked to do their part to solve the state’s budget problems, and back it up by supporting a variety of proposals that would do just that. Over two-thirds of voters felt the special election was an example of the Governor and the legislature balancing the budget on the backs of average Californians instead of asking their special interest contributors to do their share to help out. Only 19% agreed that all Californians are being asked to share the pain equally as the state deals with this budget crisis.

The lesson coming away from this election is that Californians want real solutions that protect the services the state provides, and that Californians are willing to explore revenue options to pay for the services they want. Voters are not against all tax increases, they did not oppose this measure because of taxes, and instead are looking for a balanced approach that shares the burden and moves the state forward.

Further, only 29% of voters say the state government should rely on entirely on spending cuts, with no tax increases. All other voters believe in some level of shared responsibility, balancing both spending cuts and tax increases to address the state budget shortfall. Importantly, even among ‘No’ voters, less than half (46%) say the government should rely entirely on spending cuts with no tax increases.”

Within these numbers are some rather staggering results.  When asked which approach the governor and legislators ought to take only 29% say that the government should rely entirely on spending cuts with no tax increases.  A full 65% want some sort of shared responsibility.  Perhaps more surprising is “even among ‘No’ voters, fewer than half (46%) say the government should rely entirely on spending cuts.”

Binder_4

The survey finds that voters show a support for a variety of new tax options.  Even among “No” voters, a majority supports taxes such as sin taxes on tobacco and alcohol, an oil extraction tax, closing loopholes for corporations to avoid reassessment of the value of new property, increasing the top bracket of state income tax, and prohibiting corporations from using tax credits to offset more than fifty percent of the taxes they owe.

Binder_5

Finally the polling shows the electorate opposed to massive new cuts for public schools, colleges, health care and homecare services–again even among those who voted against Proposition 1a.

Binder_6

While these results are stark and instructive, we should take caution before we draw too broad a conclusions from these.  From his credentials, Binder appears to be a reputable pollster with a decent track record as statistical analyst who has done many voter surveys over the years.  However, some of the results contradict with a recent Field Poll.

In terms of the breakdown of the electorate, the nearly 50-50 split of his survey or at least those 600 who would vote indicates a relatively robust result.  However, the questions and the phrasing of those questions would be important and they were not provided.

Nevertheless, we know that many of the liberal interest groups and citizen groups were opposing these propositions, and to assume the electorate was simply revolting at taxes and calling for cuts would be premature at best and misguided at worst.  If there is a common thread it is a message to Sacramento to work together and make real budget changes–but given the structure of government, can they?  And if they cannot, what are the voters willing to do about it?

—David M. Greenwald reporting

About The Author

David Greenwald is the founder, editor, and executive director of the Davis Vanguard. He founded the Vanguard in 2006. David Greenwald moved to Davis in 1996 to attend Graduate School at UC Davis in Political Science. He lives in South Davis with his wife Cecilia Escamilla Greenwald and three children.

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47 Comments

  1. stan forbes

    the problem is that those who are supportive of tax increases want them on someone else besides themselves-if the question were asked are you willing to pay more taxes for a certain service, one would get a more accurate view of what the voters are saying. also until the program cuts are tied to their individual costthasking if the public wants a service cut doesn’t mean anything-we all want services but that is not the question. the question is do i the citizen want them well enough so that i the citizen am wiling to pay for them and not just ask some other citizen to pay for them

  2. Mike Hart

    I wouldn’t read too much into the poll, without the specific questions it appears more like the pretext for some apologist agenda. The results of the election represent a pretty serious rejection of “business as usual” and the balance of cuts and raised taxes was rejected. If you want to read into this result that the voters were urging the legislature to go back and create more of the same, I think you are mistaken.

    Art Laffer recently wrote a pretty good article for the WSJ “Soak the rich, lose the rich” in which he correctly points out that the states with the highest taxes are suffering the most during the recession. He also points out that the states with the lowest taxes are prospering. It should be required reading for the gnomes of Sacramento before they come up with yet another tedious round of “lets tax the highest X% of the public for(insert really worth cause here) and continue to drive away the people who make California an economic powerhouse.

    California wastes mountains of money on one of the most misled and misguided bureaucracies in the nation. Our legions of public employees continue to be a bane to our success. It is not the employees themselves- each are capable of doing much good. It is the guidance that government has provided, the ill-conceived public policies and the volumes of legislative drivel coming from Sacramento that these employees are directed to enforce is what is killing our state.

    The single best thing that the legislature could do is tell state employees to all go home for long enough to balance the budget. They should then enter into a 12-step program forcing them to admit they are addicts and to stop creating stupid laws that require public funds to enforce. Every day they must pledge to remove yet another set of stupid laws, regulations and rules they have promulgated in the past. After a few years of this discipline, California may rise again from under the mass of “noble concepts” enacted by well meaning dolts.

  3. wdf

    Interesting article.

    For as bad as the economy is, as high as the unemployment is, and as big as the impact of the state budget is on voters in the state, it is puzzling that voter turnout was not higher. Understandable that at least a couple had confusing concepts — 1A and 1C — probably enough to befuddle anyone who only read it 2 minutes before voting.

  4. wdf

    “The results of the election represent a pretty serious rejection of “business as usual” and the balance of cuts and raised taxes was rejected. If you want to read into this result that the voters were urging the legislature to go back and create more of the same, I think you are mistaken.”

    Another reasonable take on the results was “go solve this yourself without coming to the voters every time”. “Man up” to making the cuts and raising the taxes.

    Bob Dunning raised the point recently in pointing out that proposition elections don’t allow the possibility for a compromise package that usually gets us through tough issues. Plus the spin on the election results allows the two camps to consider compromise even less. We might have addressed the budget issues more quickly and effectively had we not had the distraction of the election.

  5. Rich Rifkin

    [quote]the problem is that those who are supportive of tax increases want them on someone else besides themselves-if the question were asked are you willing to pay more taxes for a certain service, one would get a more accurate view of what the voters are saying.[/quote]Stan has this exactly right. Because 1A would have substantially and intelligently reformed the budgeting process, I supported it. However, I think the reason it went down so badly was because a majority (of voters) saw it as a tax increase on them (as opposed to, “I don’t smoke cigarettes. Sure, raise the taxes on tobacco.”), extending large increases in the sales tax, which they pay, the income tax, which they pay, and the vehicle tax, which they pay.

    Your headline says, “Results of Election Should Not Be Interpreted As A Tax Revolt.” Fine. But it was as close to a “tax revolt” as it could have been, given the propositions people had to decide upon.

    If we had a ballot measure which lowered the income tax on all families making $100,000 or less, it would have passed. If we had a ballot measure which capped the state sales tax at 7.25%, it would have passed. If we had a ballot measure which kept the vehicle license fee where it was three months ago, it would have passed. I don’t know if all three of those types of measures passing would equate with a “tax revolt.” I think they would confirm what Stan said: voters don’t mind higher taxes, as long as they are not the ones paying them; if it is their taxes at issue, they want to pay less, not more.

  6. Mike Hart

    wdf- I agree with your point that the election was a distraction.

    Republicans are generally pretty simple to understand- don’t raise taxes, let the state take care of itself and have government take a lesser role. Cutting costs is simple as SO much of what government touches it taints.

    Democrats are far more complex. They have strong support from the state employees so they advocate them blindly. They have support from unions and from teachers and from the people they are supposed to “manage”. It makes their decisions more complex. Talk to a democratic state legislator (I have many many times) and they are actually pretty rational people. But when it comes to cutting anything it represents cutting their supporters, so they have to support even the most inane programs. They are stuck with advocating dumb programs because they create jobs for people who vote for them.

    So this “crisis” is a blessing for the state. It provides cover for democratic lawmakers to finally join with the republicans in making actual cuts as they have no choice and will suffer little in the way of repercussions from their base.

    Tax hikes would be a mistake, this isn’t a time to try and “balance” things. We have a yawning deficit and its time to cut costs.

  7. Harvesting an Angry Electorate

    To not “find” something, one must first locate exactly where the desired item is, and then not look there when one “searches” for it. This “poll” does that, and the pro-tax, big-spending, Democratic Party certainly got their moneys worth!

  8. Dont get it

    I’m not even close to convinced that I/we are getting our money’s worth in the taxes we already pay! Therefore, it follows very logically that I will be very skeptical of any additional taxes to rescue this city/county or state. And even if we plugged the $21B hole tomorrow, we would revisit this same issue when the economy hits the skids again in a few years, or sooner.

  9. Davis Parent

    Many of these polls are known to be useless. If the pollsters had asked me “would you approve of a tax increase on everyone not named Davis Parent”, I would’ve likely answered yes as well.

    So this “crisis” is a blessing for the state. It provides cover for democratic lawmakers to finally join with the republicans in making actual cuts as they have no choice and will suffer little in the way of repercussions from their base.

    Great point.

  10. What nonesense

    I fail to see how cutting $15 billion from education is going to be a blessing for the state. I fail to see how cutting early education and prevention programs is a blessing for the state. I fail to see how releasing 38K prisoners is a blessing for the state. I fail to see how cutting health care for children and the poor is a blessing for the state. Do you actually thin before you print this crap???

  11. Cunning Linguist

    To “What Nonsense”: Those of us who spell check our postings (no matter how “thin” we may be) think we may be doing the right thing. You should try it sometime!

  12. Brian K

    Speaking of Grammar, how about slowing down a tad, Mr. Greenwald, and write sentences that make sense? “…interpreted altogether suggests…” Say wha??
    You could have cut this monster into four or five intelligible sentences and in the process a lot of useless words mucking up what makes sense:

    “David Binder Research has put together a voter survey that demonstrates that contrary to the Governor’s statement that the propositions failed because the voters delivered a message to cut spending, the research shows something very different and interpreted altogether suggests that the Governor and Legislation ought not jump to conclusions about the results of this particular election.’

  13. Greg Kuperberg

    [i]I’m not even close to convinced that I/we are getting our money’s worth in the taxes we already pay![/i]

    With the cuts that are coming this year, you should be prepared to get even less for the taxes that you already pay. UC Davis is looking at staff layoffs, and almost no faculty hiring, and furloughs, and higher student fees. This is on top of recent growth in unfunded costs. Unfunded costs is when UC reaches an agreement with Sacramento for how much an activity costs, in particular the total cost of teaching a full-time student, and then Sacramento provides less.

    One of the interesting proposals that I saw was that the state might reduce its funding for state parks to $0. All money for California’s state parks next year would come from the federal government. It’s hard to bash Sacramento for wasteful spending in certain services such as state parks, if the plan is not to spend anything at all.

  14. wu ming

    i find it hilarious that even after the poll numbers are right in front of them, conservatives persist in pretending that a majority of californians agree with them.

    hint: if most californians really did want to slash spending, and were all fired up for a tax revolt, they would elect republicans.

  15. Rich Rifkin

    [quote]conservatives persist in pretending that a majority of californians agree with them.[/quote]Persist? Which conservatives think Californians are conservative? I suspect most conservatives think that the fiscal problem in California is that California has too few fiscal conservatives.

  16. Frankly

    [quote]The electorate that voted in this special election did not look like the November 2008 electorate.[/quote]
    True, but we had a record 79.4% turnout in the November 2008 election; higher than any prior election since 1964. This last election was actually fairly consistent with other initiative-only elections.

    [quote]Democratic voters came out in roughly their normal proportion.[/quote]
    I’m sorry, but I am chuckling about David’s conclusions drawn from Binder poll/survey because it reminds me how hard we all work to defend our specific world view. I suspect many voters didn’t vote because pre-election polling data assured them that others would do the dirty work for them. After all, not voting eliminates the risk of embarrassing disclosure or accusation of alignment with those icky Republicans. It makes those Davis dinner parties all the less stressful.

    [quote]While these results are stark and instructive, we should take caution before we draw too broad a conclusions from these.[/quote]
    We should also take caution before drawing a too narrow and too passive conclusion from the results. I know zero Democrats or Republicans that want to see school and healthcare budgets cut. But, when adverse consequences of tax increases are explained, most don’t want these either. What they want is for the public sector to start trimming costs and improving service; to effectively do more with less. Private companies are doing it, families are doing it and individuals are doing it. We are all doing it because we have to. I think the conclusion to draw is that voters want the same from their government.

  17. David M. Greenwald

    [quote][quote]Democratic voters came out in roughly their normal proportion.[/quote]
    I’m sorry, but I am chuckling about David’s conclusions drawn from Binder poll/survey because it reminds me how hard we all work to defend our specific world view.[/quote]

    I’m confused here Jeff, maybe you can explain this–is not 42% (May 2009) versus 46% (November 2008), roughly the same proportion?

    Is not the big difference in this election that a higher percentage of Republicans voted and a lower percentage of independents voted?

    Do you not expect a turnout close to 2006 and 2008 in November of 2010 rather than approximating May of 2009?

    If you disagree with these, please explain. I didn’t draw any conclusion just looked at the data.

    As Wu Ming pointed out, conservatives seem to be completely discounting this poll, which was not, btw, commissioned by the Democratic Party.

    I think it’s a fair point that people are more in favor of raising taxes on others, but then again, if an actual tax were placed on the ballot, that’s what they would be voting on. So I don’t even think that point can totally be discounted.

  18. David M. Greenwald

    [quote]I know zero Democrats or Republicans that want to see school and healthcare budgets cut. But, when adverse consequences of tax increases are explained, most don’t want these either. What they want is for the public sector to start trimming costs and improving service; to effectively do more with less.[/quote]

    On the one hand, there are adverse consequences of tax increases. On the other hand, there is not way to improve services when you are cutting billions from things like education and health care. That’s just as unrealistic. You seem to recognize that the first part is unrealistic, but don’t seem to understand it is just as unrealistic for the public sector to [s]trim costs[/s] slash programs and improve services.

    As I have expressed on here multiple times locally and at the state level, I am completely in favor of looking at ways to reduce costs. I agree with everyone who thinks we’re inefficient. I think there are clearly people being paid too much in the public sector. I would love to reform our prison/ corrections system. Maybe we can do some of that as we cut the budget. But what we are looking at is not merely cutting waste right now. We are going to cut programs to the bone and I recognize full well we have to do it. But let’s not act like this is a good thing. Good things are getting thrown out as much as bad things–and I would argue we’re probably not even touching most of the worst things. We are not getting close to actually solving some of the problems.

  19. Mike Hart

    Dear “What Nonsense”-
    Occasionally I try to squeeze out a thought before writing, and you have the great good fortune of being the recipient of such wisdom on this subject. Count yourself fortunate and curl up in front of your computer.

    Cutting education is not a disaster. Dollars do not equal goodness. Throwing money at the CTA does not mean that our children will come out of the process better educated. Cutting budgets means that people have to make choices. The countless earmarks approved by our legislature will have to go away. The ridiculous seniority rules that the teacher unions insist upon will have to either go away, or we agree to accept mediocre teachers over good ones. Perhaps we will have to choose between educating children and retirement packages… We are going to have to actually make choices. The legislature will actually have to decide to fight the people who are in the way of education, and in my humble opinion, the CTA and the legislature are firmly in the way. Seeing a huge cut in budgets means that the incestuous relationship between teachers and democratic legislators is coming to an end. It is time for our elected officials to budget as if money actually matters.

    Releasing 38K non-violent offenders is a disaster for the most powerful lobby in the state- the Prison Guard union. Their goal is to keep as great a percentage of our state population in jail as possible. Once again, you seem to be nothing more than a shill for the public employee lobbies. They are not releasing murdering rapists onto the streets of Davis “What Nonsense”, you can come out from under your bed…

    Once again, cutting programs for poor, sick children is not necessarily a bad thing. You seem to equate funding with efficacy. I doubt you pay much attention, but sometime pretend you care and actually look at what percentage of funding goes to helping the sick kiddies and what a gargantuan percentage goes to administering the program through legions of bureaucrats in Sacramento. No, it is time to cut budgets to the bone. It is time for the legislature to wake up and decide between keeping legions of public employees on the dole and voting democrat, or actually trying to care for the citizens of the state.

  20. Nonsense

    “You seem to equate funding with efficacy. “

    On the converse, I dont equate funding with efficacy, efficiency, effectiveness and any other “e” word I havne’t thought of.

    I equate cutting funding with cutting things that help people. If we were taking a surgical razor and trimming bad things off the budget, I’d agree with you. Instead I agree with David, what’s going to get left are the bad things and cut are the good things. If you believe education isn’t going to be harmed by taking $15 billion off the budget, you’re either lying or stupid. If you believe they are going to cut the wasteful programs, you are kidding yourself. If you believe we have $15 billion of waste in the budget, you are also kidding yourself.

  21. E Roberts Musser

    The only thing the defeat of the propositions says it that voters did not believe it was a solution to the current budget problems in CA. I don’t think you can read anything more into it than that.

    What I find curious is the following phenomenon. Let’s take UCD for example. It is complaining at the gargantuan cuts it will have to make in the current grim economic climate, insisting it must hike student fees more, cut faculty and courses. Yet it paid a 100% increase in salary to the new UC president, a 20% increase in salary to the new UCD chancelor, is going to build a new convention center and a new high tech winery. I am not picking on UCD in particular, but I think it is endemic of our nation as a whole. We are not setting priorities in our funding. What is more important at a university, a winery or faculty and courses?

    Now I suspect the rationale is going to be that the funding comes from a different pot of money. But that kind of thinking just won’t cut it anymore. Ultimately it all comes from one pot of money – the taxpayers’ collective pocket!

  22. Greg Kuperberg

    [i]Now I suspect the rationale is going to be that the funding comes from a different pot of money. But that kind of thinking just won’t cut it anymore. Ultimately it all comes from one pot of money – the taxpayers’ collective pocket![/i]

    In the case of the winery and the convention center, that is exactly where you don’t have the full story. Here is a quote from UC Davis News ([url]http://www.news.ucdavis.edu/search/news_detail.lasso?id=8995[/url]): “The new winery and laboratory are being constructed entirely with private funds.” The press release goes on to list various vineyard interests that paid for this winery.

    Likewise the convention center. The convention center has been planned for at least 10 years, and it is at least largely and possibly entirely a campus business venture. I haven’t found a cost to the taxpayers in this project. The real controversy is sort-of the opposite, that city hotels are worried that they will lose business to the university.

    The salaries have a different explanation. As another press release ([url]http://chancellorsearch.ucdavis.edu/archive/new_chancellor.html[/url]) points out, Katehi was already being paid more as Provost at Illinois than Vanderhoef was as Chancellor. Of course, the sizable salaries at the top don’t look very good in light of the state budget crisis; there is no way to perfume them. But they are the reality and I’m not all that upset by them, for several reasons:

    (1) Even Katehi’s salary as chancellor is at the low end of the competitive range. “Take a pay cut for the privilege of working for University of California” is not the way to build a good research university. If you hire that way, you will hire talented quitters and less talented stayers.

    (2) Katehi can easily spend five times her salary at the drop of a hat. With chronic bad judgment she could burn through a hundred times her salary. I do not at all buy the line that a 20% budget shortfall is a blessing in disguise that will make the state eliminate wasteful spending. But it is true that university administrators can and do waste a lot of money at times. One way that they might do that is by just shopping freely for clerical staff. I mind that a lot more than I mind their salaries.

    (3) For every minute that you spend thinking about Katehi’s or Yudof’s salary, you ought to spend several hours thinking about private CEO salaries, including people who are paid out of your pension, and your tax dollars too through government contracts. Richard Grasso paid himself $140 million as chair of the non-profit New York Stock Exchange. That one guy paid himself about the same as all of the chancellors of all public PhD-granting universities in the United States get paid in one year.

    Maybe it isn’t perfect that Katehi is paid several times more than I am. But it truly is at the noble end of the reality for her type of job, and the perfect is the enemy of the good.

    By contrast, the UC Davis budget for next year in not just short of perfect. The priority of a high-level education for 25,000 students is a square peg; the funding next year is a round hole. Even if Katehi’s salary and the winery and the convention center were all cancelled, they would still raise fees, and freeze hiring, and cut staff, and do furloughs.

  23. UC watcher

    “(3) For every minute that you spend thinking about Katehi’s or Yudof’s salary, you ought to spend several hours thinking about private CEO salaries, including people who are paid out of your pension, and your tax dollars too through government contracts. Richard Grasso paid himself $140 million as chair of the non-profit New York Stock Exchange. That one guy paid himself about the same as all of the chancellors of all public PhD-granting universities in the United States get paid in one year.”

    A very rational explanation that goes absolutely nowhere to making most people feel any better. By mentioning, Richard Grasso, you just associate and strengthen the connection of Yudof and Katehi with that kind of naked greed.

    News of excessive executive salaries are symbolic, provoke visceral reaction in the public, and should be avoided in times like this. A month ago, press releases and some news stories explained how bank executives salary bonuses of firms receiving federal bailout were really just a mere drop in the bucket compared to the size of the total bailout.

    But the size of those bonuses or excessive salaries is far outweighed by the negative publicity that it attracts. Do you think the publicity over Katehi’s and Yudof’s salaries inspires positive feelings and trust toward the state? It’s one understandable story of greed and apparent lack of concern that, to many, comes to symbolize what’s wrong with the whole state.

    Executives, ideally, are leaders who should be prepared to set an example and set the tone for fixing problems.

    At least we are seeing some evidence for that kind of PR awareness locally with the school district.

  24. Greg Kuperberg

    [i]News of excessive executive salaries are symbolic, provoke visceral reaction in the public, and should be avoided in times like this.[/i]

    I am not a public relations official, I am a math professor. My comment is not a press release, it is an explanation that I intend for adult thinkers.

    The truth that the state budget is dying from symbolism, from public sentiment, from cracking the whip at the top, and from “setting the tone”. They have been doing all that for decades, but they haven’t followed through with sound accounting. The truth is that Proposition 1F is a bit of foolish spite standing in for even one step in the right direction.

    Hasn’t it been said that the state government should be run more like a business? If it were, management would be paid more, not less. Granted, Richard Grasso is a very negative example. But even reputable companies of the same size as UC pay their executives a lot more than Yudof gets paid. Ten times as much is pretty typical.

    You should understand that I’m one of the people who might get a furlough or a salary freeze. My salary ultimately comes from the same pot as Katehi’s salary, and she is paid far more than I am. I don’t want more “PR awareness”. I’d rather have substance, and the chancellor’s salary has very little to do with it.

    In fact one thing that I do not want is for good employees to be hired away from Davis with huge raises. That’s where noble symbolism gets you after a few years.

  25. UC watcher

    “Hasn’t it been said that the state government should be run more like a business? If it were, management would be paid more, not less. Granted, Richard Grasso is a very negative example. But even reputable companies of the same size as UC pay their executives a lot more than Yudof gets paid. Ten times as much is pretty typical.”

    During “normal” times your argument makes complete sense — sure, why not offer more competitive salaries. But when your organization is bleeding in deficit, I don’t think you get a very cooperative attitude from subordinates or taxpayers if the top executive or administrators are taking raises. The UCD chancellor and UC president positions have taken raises when jobs are being shed and furloughing is going on.

    If some folks get hired away in these times, well, maybe that’s an easy way to take on employee reductions. It sounds like you’re worried about keeping a top quality organization when in fact the bigger problem is that the organization faces a real possibility of collapse from fiscal insolvency.

    This crisis offers many executives the opportunity to prove themselves. Their proven success in these times will be worth far more in potential future earnings than any salary increases they could take now. If an executive/administrator succeeds in pulling his/her organization through this very tough economic climate, that’s a resume for a raise or a better future job elsewhere. I think those execs will get more cooperation and smoother sailing right now without those raises.

    Ultimately, we may have to agree to disagree.

  26. Greg Kuperberg

    [i]It sounds like you’re worried about keeping a top quality organization when in fact the bigger problem is that the organization faces a real possibility of collapse from fiscal insolvency.[/i]

    Let’s not fly off the handle about this. Neither UC nor UC Davis is at risk of collapse from fiscal insolvency. They are at risk of slow decline because of dysfunction in Sacramento. If it were as simple as limping through one terrible year, I wouldn’t mind as much.

    I think that it makes sense for me to take the long-term view. I came here in 1996.

    [i]The UCD chancellor and UC president positions have taken raises when jobs are being shed and furloughing is going on.[/i]

    We should at least agree to the facts. Both Katehi and Yudof only got 10% raises from their old jobs. Maybe Katehi could have seen the fiscal crisis coming, but Yudof was hired more than a year ago, before any of this happened.

    I can agree with you this much. If Katehi wants to show solidarity with me by donating some of her pay to the campus, then I’ll applaud it, a little bit. I don’t demand it and it isn’t one of the tough decisions that she needs to make, but sure, symbolism counts for something.

  27. UC watcher

    “Maybe Katehi could have seen the fiscal crisis coming, but Yudof was hired more than a year ago, before any of this happened.”

    Yudof came on less than a year ago, back in June. In spring of ’08 the state was already dealing with declining revenues and budget cuts. By that point, general expectations were that things would get worse — those expectations have been met. Some sources even mark 2007 as the start of this economic decline. I’m sure he could see this coming before he started at UC.

  28. Greg Kuperberg

    Fine, then. Let’s agree that it has symbolic value for Yudof and Katehi to waive part of their salaries. Then what? They will still have to raise fees and cut services whatever they do with their salaries. Maybe the students or the taxpayers can be angry about the wrong symbolism, but it does not truly mean that the UC budget has the wrong “priorities”.

    What bothers me is the extent to which Sacramento had managed the UC contract in crisis mode for years before the real crisis hit. That is one of the realities that contradicts the idea that the crisis is a blessing in disguise. Even before this fiscal failure, I didn’t think that the UC system was all that fair to students. Certainly they deserve more student housing than UC has built. The fees are not all that low, and non-resident tuition is practically a shakedown.

    I admit that there are pockets of waste in the UC budget. Maybe there would be a small silver lining if they reduce certain campus units that can be reduced. But this is not all the same thing as watching people get hired away with huge raises. That really is nothing to celebrate.

  29. David M. Greenwald

    One of the things I guess I would want to question/ examine is this notion of competitiveness. From my standpoint, the cry for competitive contracts has become a huge accelerator for salaries at all levels of government and has to a kind of nuclear arms race mentality.

    Above and beyond the notion of symbolism is the concept of fairness that suggests that when staff is being laid off, student fees go up, admissions shrink, lower end employees barely scraping by are not given raises, maybe this is not the appropriate time to give your top dog a hefty salary increase over his or her predecessor.

    I also think implicit in this argument should be some notion of VOR as adapted from the sabremetricians of baseball, it’s a mathematical formula that tries to ascertain a given baseball player’s value over the typical replacement.

    At the UC level this gets at the notion that it seems assumed that you will get a better value–ie stronger candidate at $400,000 than at $300K or even $200K. But is that indeed true?

    We’ve used the same competition notion for our fire department despite the fact that a single position opening brings forth over 150 candidates–perhaps that suggests we could get as much bang for the buck at a considerably lower rate.

  30. Greg Kuperberg

    [i]Above and beyond the notion of symbolism is the concept of fairness that suggests that when staff is being laid off, student fees go up, admissions shrink, lower end employees barely scraping by are not given raises, maybe this is not the appropriate time to give your top dog a hefty salary increase over his or her predecessor.[/i]

    If that’s what it takes to be fair, they shouldn’t have hired Katehi or Yudof at all. Katehi was already paid more than Vanderhoef and Yudof was already paid much more than Dynes.

    My guess is that recruitment would simply have looked very different. They would have thought much less about hiring an outsider with a kind of track record of running a university. There is competitiveness and there is competitiveness. I’m not talking about turning Davis into Harvard plus Stanford squared. Katehi was provost at UIUC and Yudof was president of the University of Texas. These are fairly similar positions to what they have now.

    Here is an interesting example ([url]http://www.siliconbeat.com/2009/05/08/top-genentech-exec-named-ucsf-chancellor/[/url]). Susan Desmond-Hellmann is taking a pay cut from $2 million at Genentech to $450K as the new chancellor at UCSF. Is this a symbolically satisfying recruitment? Or is it symbolically unsatisfying, if Desmond-Hellmann will be paid any more than her predecessor?

    [i]We’ve used the same competition notion for our fire department despite the fact that a single position opening brings forth over 150 candidates–perhaps that suggests we could get as much bang for the buck at a considerably lower rate.[/i]

    First, just counting applications is not the point. The yes-or-no model that candidates are either “qualified” or “not qualified” also misses the mark. If your house is on fire, it’s important to have very qualified people handle it.

    Second, joining a fire department is hardly the same thing as running a two-billion-dollar university campus. In fact, since “UC watcher” raised the specter of fiscal insolvency, if Davis were run in the same populist manner as the state government, then maybe I really would worry about its fiscal solvency.

  31. wdf

    Higher salaries could lure some employees away, but I don’t imagine it’s always that simple. Many spouses also hold jobs, sometimes local or nearby family/community connections, quality of the community, housing, the type/demographic of students (both grad and undergrad), the cohort of faculty, research opportunities, proximity to other professional institutions.

    I agree with Kuperberg’s comment on student fees. But one thing that California still has is a pretty good deal in community colleges. Doesn’t get the 4-year degree, but it helps get there. And that bargain may not last long either, because recent budget proposals call for community college fee increases also.

  32. David M. Greenwald

    “If that’s what it takes to be fair, they shouldn’t have hired Katehi or Yudof at all. Katehi was already paid more than Vanderhoef and Yudof was already paid much more than Dynes.”

    Again, I ask the question what is their value over replacement?

  33. UC watcher

    “If your house is on fire, it’s important to have very qualified people handle it.”

    Yes, but very qualified firefighters may be had at lower salaries, too.

    “Here is an interesting example. Susan Desmond-Hellmann is taking a pay cut from $2 million at Genentech to $450K as the new chancellor at UCSF. Is this a symbolically satisfying recruitment? Or is it symbolically unsatisfying, if Desmond-Hellmann will be paid any more than her predecessor?”

    Hiring from outside the system can be a good thing at certain times. But all the examples you give of outsiders coming to UC (Yudof, Katehi, Desdmond-Hellmann) resulted in higher salaries. Could any inside candidates have been just as good, without running the risk of higher salaries?

    “In fact, since “UC watcher” raised the specter of fiscal insolvency”

    I don’t know how UC manages its payments from the state, but this coming year it will be interesting to see if the state and dependent agencies can make payroll on time.

    This may well be the worst economic downturn of our lifetimes. If this crisis can’t shake us into a more fiscally appropriate frame of mind…

  34. Greg Kuperberg

    [i]Again, I ask the question what is their value over replacement?[/i]

    That, of course, is hard to quantify. University presidents don’t have batting averages. What I can tell you, though, is that Katehi’s salary is below the median ([url]http://www.nytimes.com/2008/11/17/education/17college.html[/url]) for public research universities.

    [i]Could any inside candidates have been just as good, without running the risk of higher salaries?[/i]

    You got me to agree that a voluntary salary reduction would be an important symbolic step for someone like Katehi. Fine. But now you’re saying that a high salary is this big “risk”. That is reading way too much into this issue.

    [i]I don’t know how UC manages its payments from the state, but this coming year it will be interesting to see if the state and dependent agencies can make payroll on time.[/i]

    Certainly making payroll on time is the big risk, not Katehi’s or Yudof’s salary. They need enough layoffs, furloughs, etc., so that after that, they can pay people what they promised to pay them. That is the principle that is getting bruised in Sacramento, that credibility is more important than appeasement.

  35. Don Shor

    “They would have thought much less about hiring an outsider with a kind of track record of running a university.”
    It seems to me they could have just hired from within, as they did with Emil Mrak, James Meyer, and Larry Vanderhoef.

  36. Greg Kuperberg

    [i]It seems to me they could have just hired from within, as they did with Emil Mrak, James Meyer, and Larry Vanderhoef.[/i]

    Yes they could have, if they had viewed the chancellor’s salary as the big problem that needed to be solved. Instead they had other concerns. For one, they noted that every chancellor in UC Davis history had been in ag/bio. They decided that they wanted something different this time.

    Besides, Vanderhoef was provost at Maryland in 1984 when he was hired as provost at Davis.

  37. Frankly

    [quote]I’m confused here Jeff, maybe you can explain this–is not 42% (May 2009) versus 46% (November 2008), roughly the same proportion?

    Is not the big difference in this election that a higher percentage of Republicans voted and a lower percentage of independents voted?

    Do you not expect a turnout close to 2006 and 2008 in November of 2010 rather than approximating May of 2009?

    If you disagree with these, please explain. I didn’t draw any conclusion just looked at the data. [/quote]
    David, certainly I don’t dispute the facts of the survey. I agree Republicans came out in bigger numbers. Interestingly enough, I think a comparison of those two elections makes my point. Voters don’t vote when they don’t have a compelling choice, or when what they like cuts across their Party loyalties. Many Republicans disliked McCain and Obama, and so didn’t vote. Likewise I think it is wrong to conclude stronger support for taxation because of the missing Democrat votes. I think you could conclude that many Democrats that didn’t vote also do not support tax increases.

    [quote]On the one hand, there are adverse consequences of tax increases. On the other hand, there is not way to improve services when you are cutting billions from things like education and health care. That’s just as unrealistic. You seem to recognize that the first part is unrealistic, but don’t seem to understand it is just as unrealistic for the public sector to trim costs slash programs and improve services.
    [/quote]
    You will have to trust me on this if you don’t have management experience working for large, complex organizations. For these, it is impossible to design and implement money-saving improvements from the bottom-up (It is too complex for management to weed through every idea, plea and complaint from the workforce and constituency). It is also foolish to just cut expenses without a corresponding effort to ensure service and product quality won’t diminish. It takes a top-down approach: budget cuts along with performance improvement mandates.

    There are several management-science principles for how bureaucracies grow. One basic principle is that managers will build inefficient empires unless otherwise challenged; and these empires must periodically be destructed and rebuilt if the organization is to survive in an ever-growing competitive market. Another is the “deadwood” principle: where, unless periodically cleared, a percentage of the workforce will wither and become low performers or nonperformers (including managers) and clog up the machinery. People can grow uninspired about their job (usually because there are in the wrong job) and drag down overall morale and motivation within the units, departments and teams that they work in.

    This is how politicians can solve the California budget crisis: cut costs while mandating improved service quality. While you are thinking of all the ways that this can’t be done, think about the same challenge facing Japanese automakers a few decades ago. I think Liberals hold out false hope that there is support for tax increases. However, I agree that there is little support for cutting services. Therefore, we need vision, leadership and persistence for reinventing much or our government into leaner and more efficient models.

  38. Frankly

    [quote]Many Republicans disliked McCain and Obama, and so didn’t vote.[/quote]

    I meant to write: Many Republicans disliked McCain and liked Obama, and so didn’t vote.

  39. Don Shor

    “This is how politicians can solve the California budget crisis: cut costs while mandating improved service quality.”
    Can you give an example of a government entity that has ever done this?

    “I think Liberals hold out false hope that there is support for tax increases. However, I agree that there is little support for cutting services.”
    There is majority support for raising some taxes. There is not 2/3 support for it, in the public or in the legislature. So we will lurch from one fiscal crisis to another for the next several months.

    “Therefore, we need vision, leadership and persistence…. ” LOL — so it won’t happen.
    The problems we have are structural and were largely created by the voters themselves.

  40. Greg Kuperberg

    [i]One basic principle is that managers will build inefficient empires unless otherwise challenged; and these empires must periodically be destructed and rebuilt if the organization is to survive in an ever-growing competitive market.[/i]

    You could be right about that, Jeff. Maybe the University of California is an empire that will be destroyed and rebuilt — in Canada. Any competitiveness guru will tell you that sometimes you have to relocate. Painful though it may be to some.

  41. Frankly

    [quote]Can you give an example of a government entity that has ever done this?[/quote]
    No, other than small examples, but Don I prefer to hitch optimism to this beast. I think California is the poster child for the broken model of state governance and public-sector business and now is the time to demonstrate leadership for significant change. Throwing more money at it, assuming voters can truly tolerate taxing themselves again and again, just helps it grow more dysfunction. I can ask a contrasting question : “can you give an example of where more tax money was ever enough?”

    The beast that grows is no different across all large organizations. It grows in complexity… basically increasing the per-unit cost of every service through increasing inefficiency. Process steps are added to deal with some new problem or to administer some new complexity or service, and new employees are hired to handle the assumed increased workload. Progressive organizations utilize TQM and other continuous improvement best practices like Six Sigma to constantly tweak the process model to produce the most value and the lowest cost. Others periodically undertake business reengineering efforts to destruct and redesign overweight processes. The public sector needs both. A few agencies already dabble in this stuff, so it is not a stretch to consider a larger and more global initiative.

    Personally, I know of only one approach for fixing California’s budget mess: cut budgets based on a simple prioritization (simple in structure) and then mandate performance results. You do this by telling every agency to come up with a plan for how they will cut x percent and improve by x goals. Then manage through this process to tweak, approve and adopt all the plans. Offer and pay incentives to employees not cut for meeting goals. Fire managers and employees that don’t create acceptable plans and/or that exceed budgets and/or that don’t meet their goals after being given the chance. Then we can hire replacements with the talent needed to get the job done.

    [quote]You could be right about that, Jeff. Maybe the University of California is an empire that will be destroyed and rebuilt — in Canada. Any competitiveness guru will tell you that sometimes you have to relocate. Painful though it may be to some.[/quote]
    Greg, I think the idea with “destruction” as it relates to business is more about reengineering and contraction of internal processes than complete destruction of the institution. The idea is to cut out the tumors so the patient lives. Tom Peters is a competitive guru that used to opine for a CDO “Chief Destruction Officer” to roam the halls of large companies and root out waste. I think a CDO would be made busy after roaming the halls of UCD.

    I agree that competition means you sometimes must relocate. I think this is evident in the number of companies and wealthy individuals leaving California for low tax states, and the reason why some Americans go to Canada for their prescription drugs, and some Canadians come to the US for better access to some healthcare procedures. I also suspect there are some talented visionaries and entrepreneurs out there that could privatize our system of public schools and do a better job educating our kids.

  42. Greg Kuperberg

    [i]No, other than small examples, but Don I prefer to hitch optimism to this beast.[/i]

    The thing that you are missing, Jeff, is that “optimism” can just be a smug way to endorse the outcome. It may be true that you don’t know any Republicans who just want to see education and health care cut, but they are out there. There are plenty of ideologues out there who think that public education is no more than government intrusion into the family; and that public health care, like any other form of welfare, simply makes its recipients lazy. Beyond abstract ideology, a fair fraction of tax receipts come from people who are so rich that they have no use for public services.

    [i]I think this is evident in the number of companies and wealthy individuals leaving California for low tax states, and the reason why some Americans go to Canada for their prescription drugs, and some Canadians come to the US for better access to some healthcare procedures.[/i]

    Another example is good faculty who leave the University of California for other universities with more financial credibility.

    As for wealthy individuals who leave for low tax states, Mike Hart mentioned a Wall Street Journal article that made the same point. But the thing is, a lot of these people are so rich that even if they “leave”, they can still hang around. If you don’t know how many houses you own, you might not which state is your home either. Maybe your tax broker is the only one who knows. So this is also a smug way to endorse a certain outcome. This outcome would have looked a little better for California, if Prop 13 had not shifted tax revenue from property taxes to income taxes.

  43. Frankly

    [quote]“optimism” can just be a smug way to endorse the outcome.[/quote]
    Sometimes, but when the outcome is good optimists are good to have around. Don’t we need a bit of “can do” to at least balance all the “can’t do” arguments?

    [quote]This outcome would have looked a little better for California, if Prop 13 had not shifted tax revenue from property taxes to income taxes.[/quote]
    I think this just trades one set of budget problems for another. Remember, reducing tax liability is part of our investment strategy. Also, we compete with other states for affordable housing. Lastly, if you’re thinking this is a more stable source of state revenue, then why have property tax revenues dropped precipitously?

    Let’s say you are a private-sector employee and you are your spouse make $210k AGI this tax year. The Feds will take 33% and CA takes 9.3%. So out of your hard earned $210k, the government takes about $88,830 and you are left with $121,170 (or about $10k per month). With what’s left, you have to pay your $3000/mth mortgage and $500/mth property tax bill, pay for some or all of your healthcare costs, pay for your insurance, pay for your 1.7 kids’ college expense (no tuition support for you… you make too much), pay for energy and food and transportation for your family, give some to your church and to charities, and fund your own retirement through a now worthless 401k. Now, while you are paying for these things you are also paying the highest state fees and sales tax in the country. So your actual purchasing power is diminished again.

    In this scenario, please explain to me how you can handle higher taxes, and why you would be happy to pay them especially considering the bloat we know exists in our state government.

  44. Sara Lee

    Davis Parent,
    “Many of these polls are known to be useless. If the pollsters had asked me “would you approve of a tax increase on everyone not named Davis Parent”, I would’ve likely answered yes as well.

    So this “crisis” is a blessing for the state. It provides cover for democratic lawmakers to finally join with the republicans in making actual cuts as they have no choice and will suffer little in the way of repercussions from their base.

    Great point.

    Arnold had no intention of this thing passing. If the proposition was to raise taxes to the rich, then the proposition would have passed. Why should the democrats work with republicans when republicans never compromise. they are there to serve the rights of ther rich. if we cut all social services, which is what republicans want, then we would have to spend that very same money into prisons and law enforcement. There would be armegeddon as poor ppl scramble to make ends meet and eat, just so the rich can keep their billions.
    if you would rather imprison someone than help them find a way to live decently then you are indeed a truly sick individual.
    ps. taxes have already been raised, sales tax, dmv fees, court fees etc etc.
    he’s found any and every way to raise revenues from the poor and prevent him and his rich constituency from paying anything. corporations desperately rely on government. government props up their low wages by providing affordable housing, food stamps and medicare.
    without these government services, the corporations would have to fork out decent wages so people could afford to work for them. if you want to get rid of these vital services, then perhaps we can become like a third world country where the poor have to work for nothing and make ends meet by living in shanty towns
    but oh wait, that’s already happening. remember tent city? how can you call yourself Christian and be okay with the fact that there are millions suffering?
    go to church pray and think about your conflicting values.

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