California's Economic Dissonance

Wednesday, January 22, 2014
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A growing consensus in California’s chattering class is that Gov. Jerry Brown has not only saved the Golden State from fiscal collapse, but America’s nation-state is enjoying the bounties of an economy on the mend. Logic dictates that, in a state on the uptick, its residents should likewise be in an upbeat mood. But that’s not necessarily the case, according to a newly released Hoover Golden State Poll.

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Editor’s Note: Last month, the Hoover Institution’s Golden State Poll—a partnership between Hoover and the online polling firm YouGov—surveyed 1,000 Californians on economic and political issues, the second in a series of looks at California’s well-being. Two more surveys will be conducted over the course of 2014.

Pick up a newspaper in California and it’s hard to ignore the talk of a robust economic and fiscal “comeback”—the Golden State adding jobs, while state government, after years of massive budget deficits and painful spending cuts, at last having a surplus to reinvest in government programs. There’s only one problem with such a narrative—well, two if you include the fact that California’s recovery is shallow compared to others past. And that would be a sober realization that the same champagne giddiness shared by politicians and reporters covering them hasn’t affected California voters.

 

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  Photo credit: Neon Tommy

In September 2013, the inaugural Hoover Institution Golden State Poll found little public support for the notion of a “California Comeback.” Our second Golden State Poll, released this morning as Gov. Brown delivered his annual State of the State Address in Sacramento, confirms the pattern: as far as confidence and optimism are concerned, Californians are the equivalent of drivers in a traffic jam on the I-5 Grapevine: stuck in neutral and not happy with the current state of affairs.

This latest Hoover survey (click here to read the results) found that five out of six Californians believe their family finances are either about the same or worse versus a year ago—statistically, that’s little different from September’s data results.

Interestingly enough, some Democratic-friendly constituencies that, one would assume, would buy into the narrative of a comeback skippered by Democratic leadership in Sacramento aren’t toeing the party line: 76% of millennial Californians (ages 18-29), 81% of Latinos weighed in as about the same or worse off financially. Feeling the same: 79% of Democrats in the survey and 77% of self-identified liberals.

Logic also dictates that a robust job market—California is projected to add approximately 264,000 new jobs in 2014, according to Moody Analytics, a global economic forecasting company—would tilt public confidence in a more positive direction. But that wasn’t the case. Per this latest survey, 50% of employed Californians are unconfident that they would be able to find a new job in California over the next six month that pays equally as well as their current position, essentially no change from September. Meanwhile, Californians expect their expenses to increase over the next year because of actions taken by state leaders in Sacramento. 66% of Californians believe state tax rates will increase a little or a lot over the next year with 51% of Californians unconfident in their ability to pay higher state taxes while meeting current expenses.

On a more political note: Californians seem wary of Gov. Brown’s promise that 2014 will not be a year of tax increases, with two-thirds of the survey’s respondents believing their taxes will increase a little or a lot, and all of 1% believing their state taxes will actually go down. Californians also don’t view their government as an exportable product—this, despite the past several months’ glowing reports of a productive, gridlock-free Sacramento. By a 2-1 margin, Californians don’t deem their state government as a model for the other 49 states to emulate. The only blocs who do believe in the California model, by a plurality: African-Americans, Democrats, and liberals.

The great California disconnect also popped up in voters’ take on Sacramento’s job performance. While state leaders continue to pat themselves on the back for budgets ostensibly balanced and delivered on time, their constituents aren’t as enamored. Gov. Brown sported a net disapproval rating of 4 points (33% approve versus 37% disapprove); the State Legislature weighed in with a 28-point net disapproval (21% approve versus 49% disapprove).

In what could be a warning sign for Democrats hoping to add congressional and legislative seats in 2014, 48% of millennial Californians and 38% of Latinos neither approve nor disapprove of Brown’s performance as governor; 50% of millennials and 40% of Latinos feel the same about the State Legislature. As those two blocs are at the heart of the California Democratic existence, its spells trouble in terms of motivating the party in an election year that features Brown, and not President Obama, at the top of the slate.

The survey also suggests that Californians’ ambivalence is depressing Brown’s re-election numbers, should the state’s longest-tenured governor seek a final term this fall. Barely one-fourth of Californians (26%) said they would like to see Brown re-elected while 44% would rather see someone else hold the job. Nevertheless, one-third of respondents said they’ve yet to decide. That includes 42% of millennials and 38% of Latinos.

There is one other disconnect—and it’s an eye-opener as California has a reputation for wandering beyond the nation’s more centrist political mainstream. That disconnect: when asked to list their top priorities, Californians downplayed progressives' most cherished ideas and ideals while giving voice to issues that don’t necessarily speak to expansive government or social engineering.

Nearly three-fourths of the survey’s respondents (71%) rated strengthening the economy as California’s top priority. Finishing second and third: improving the job situation (70%) and balancing the state budget (64%). Improving education, despite the use of that topic in the 2012 election to justify higher taxes and, given the current state budget surplus, to justify new spending in 2012, placed a more distance fourth in the survey (50%), slightly ahead of reducing special interests’ influence (46%) and reforming the state’s tax system (45%).

Indeed, growing the economy and holding a line on spending have been twin hallmarks of Brown’s at-time stodgy persona in this, his second turn as California’s governor. Ironically, it’s the progressive ideals his fellow Sacramento Democrats embrace that didn’t track very well. At the bottom of the Golden State Poll’s list of priorities: dealing with global warming (23%), strengthening gun laws (22%) and continuing California’s high-speed rail project (10%). Thus we have one final disconnect: despite this survey’s confirmation that the high-speed rail is fast becoming a toxic issue for California politicians, Brown continues to champion it, thereby risking his political legacy.

As detailed in a September Defining Ideas piece, the notion of a “California Comeback” is quite misleading at best and mystical at its worse. This latest survey only reinforces this fact. In order for a comeback to be real, people actually have to believe things in California are getting better. Yet, just 28% of Californians believe that to be the case, while a plurality (39%) believes things in California have actually become worse.

Perhaps state leaders are banking on the notion that Californians’ attitudes on the state of the state eventually will rise to the narrative they’re being fed. Meanwhile, in a bone-dry state sorely in need of a good soaking, it’s Californians’ confidence in the way things are that remains in a drought.