State voters need fiscal education

Most California voters seem unaware that state government still spends more money than it takes in each year, with a $5 billion deficit on tap for 2008-09. There is also minimal awareness that the state approved $93 billion in bond debt during the last decade and is considering an additional $43.3 billion issue this year.

In fact, more than half of polled voters across all parties admitted knowing very little or nothing about how California bonds are paid for. This May, the monthly survey of statewide issues by the Public Policy Institute of California focused on how well voters understand the state’s financial situation. The worrisome results indicate that “what voters don’t know may be lulling them into a false sense of fiscal security at a time when the state’s finances are still on shaky ground,” according to the report.

Overwhelmingly, Californians have become more optimistic about the state budget. The percentage seeing the budget as a “big problem” fell by one-third since 2004, making this the first year since Gov. Arnold Schwarzenegger took office that less than half the public was deeply concerned about the state’s spending patterns.

Support is also dropping for the principle that specific limits should be imposed on how much more Sacramento is allowed to spend each year, although 55 percent still favor spending limits. And barely more than half those polled think it makes sense for the governor to prepay bond debt in order to reduce interest. Enthusiasm is much wider for boosting spending on education, social and health services, roads and infrastructure.

The public seems generally comfortable with California’s large deficit and spending gap because it has little understanding of where the state revenues come from and what the money is spent on. Almost two-thirds did not know personal income tax is our biggest revenue source, incorrectly naming sales tax or corporate tax instead.

Barely one-third knew that K-12 education costs take the biggest portion of state spending. The rest thought it was either social and health services, or prisons. Presumably that is why a sweeping 69 percent strongly favor the governor’s proposal to give education spending a bigger raise than other budget areas.

The most important problem facing the state today is immigration, according to one-fourth of Californians surveyed. Only 3 percent saw taxes and the state budget as most important. Eleven percent apiece thought the No. 1 problem was either gas prices, or jobs and the economy.

With California voters apparently living on a soft, pink cloud when it comes to knowing something about California fiscal realities, some of the most critical policy issues in next year’s elections — such as billions of dollars for new infrastructure bonds and expensive new health coverage entitlements — risk being decided by the best barrage of misleading television commercials.

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