SPECIAL REPORT : The State...

California politicians may once again become victims of the law of unintended consequences: When you tinker with a system, you may fix what seemed wrong at the time, but you will

create some new problem you never anticipated.

Today, California finds itself severely hampered by formidable political constraints and by demoralizing institutional crises at a time when the public needs of its rapidly growing and diverse population are steadily mounting.

With a new governor and a possibly chastened Legislature, it is possible that the state can ease some of its financial and social crises.

Voter rejection of almost all the bond measures and tax initiatives on the November, 1990, ballot has at least temporarily foreclosed the most politically expedient way of getting out from under the fiscal bind of Propositions 13 and 4. Those measures first limited property-tax collections and then restricted state spending.

Last fall, the liquor industry successfully protected itself from an increase in the alcohol tax designed to make up some of the loss in revenue.

To the disgust of many voters, the campaigns for statewide offices and ballot propositions were expensive, superficial and dominated by mindless 30-second TV spots. The image of the Legislature was greatly hurt by last summer’s protracted budget negotiations and the criminal convictions of two incumbent politicians, prompting voters to enact the more Draconian of two competing term-limit measures.

The prospects for 1991 are no better. Gov. Pete Wilson will assume a projected budget deficit of possibly $6 billion and will face a Legislature dominated by grumpy Democratic incumbents who do not appreciate his support for term limitations.

But will any of the prospective cures--such as campaign-finance reform--create new problems? To find out, we need to ask whether the present situation is like any other moment in California history. Probably not. Aspects of the crisis, however, have a familiar historical ring.

At the top of the issue list is coping with the demands of high population growth. California’s population grew 26.1% during the last decade, twice the national rate, to 29.8 million. This growth has strained the highway system, increased pollution and placed extraordinary demands upon the public schools.

But growth has been a recurring issue in California history. In the early 20th Century, Progressive Republican governors--Hiram W. Johnson, William D. Stephens and Clement C. Young--had to find creative ways to get reluctant taxpayers to pay for the highways, water projects, schools and social services necessitated by the state’s rapid development. Foreshadowing the build-now-pay-later tactics of recent propositions, California’s first hard-surface highway system was financed in 1919 by means of a $40-million bond measure.

Tax revolts are nothing new to California. In 1921, Gov. Stephens secured a 50% expansion in the state’s budget with a 35% hike in the state’s corporation taxes. He tried to protect himself from anticipated political backlash by linking tax increases to business-like improvements in the efficiency of the state’s budgeting and accounting system.

But, as Florida’s Republican Gov. Bob Martinez more recently discovered in November, hell knows no fury like a taxpayer betrayed. The conservative wing of Stephens’ party, angered by his tax policies, successfully ran a conservative candidate, Friend Wm. Richardson, against him in the 1922 primary.

In an effort to end the “orgy of extravagance,” the new governor vetoed more than half of the bills that had been passed by the 1925 Legislature, which, incidentally, was controlled by his own party. Even the “Iron Duke” cannot match this record of tax opposition.

Special interests and lobbyists were at least as powerful then as they are today. In the first half of the 20th Century, the most influential lobbyists--Artie Samish, for one--played a role in elections similar to that of Assembly Speaker Willie Brown and Senate President Dave Roberti today--that is, they could “select and elect.”

When Gov. Frank F. Merriam tried to increase taxes to raise needed revenue for the state during the depth of the Depression, Samish, the chief lobbyist for the threatened liquor and mining industries, reportedly told Merriam, “I helped you get into that governor’s chair. And I’ll get your ass out of it, too.”

With Samish’s encouragement, Lt. Gov. George J. Hatfield ran against Merriam in a divisive and rancorous 1938 Republican primary, leading to the election of the first Democratic governor in the 20th Century in California.

The role of collecting campaign contributions from special interests has passed from the larger-than-life lobbyists to the party leaders in the Legislature. Defenders of the old system argue that this has destroyed bipartisan cooperation and increased party-line voting in the Legislature during the last decade. This unintended byproduct of reform would be more palatable if it had lessened the value of special-interest campaign contributions at the same time. But, in fact, money from labor unions, businesses, agriculture, professional groups and public employees continues to dominate off-year contributions to incumbents, particularly those incumbents who chair important committees.

Recent campaign reforms may actually worsen this pattern. Proposition 73, if it is upheld in the courts, would divide the election cycle into three parts, allowing separate contributions to a given candidate in each segment.

Since individual donors rarely give money in the off-year, and challengers rarely raise money then, Proposition 73, in effect, gives special-interest PACs three chances to contribute to, and thereby influence, incumbents.

There is no state in the country that has tried harder to reform its political system than California. Neo-progressive, middle-class reformers are as indigenous to the state as marijuana plants. But, for all this good-government effort, no state has failed more miserably in actually controlling campaign finance. California has managed to change the ground rules for the “select and elect” game, but not the cast of principal players or the critical role that money plays in California elections.

The primary effect of campaign-finance reform to date has been to make it harder for candidates to raise campaign money without adequately controlling election costs. It should have surprised no one that Wilson and Dianne Feinstein spent more time with contributors during their gubernatorial campaigns than with groups of voters.

Unfortunately, one cannot look to the public for guidance on this matter. Only a small fraction of mostly upper-middle-class voters are willing and able to give money to a political campaign. A majority of voters consistently reject any attempt to institute public financing of elections. And yet, allowing a small fraction of voters and many interest groups to pay for campaigns seems to have undermined the public’s perception of the Legislature’s integrity. California’s politicians are both caught in and unfairly blamed for a campaign finance Catch-22.

However, campaign finance is only part of the present malaise. A lot of the testiness about California politics stems from frustration with divided government. Wilson’s election guarantees that, for at least two more years, a Republican governor will have to share power with a Democratic-controlled Legislature.

Republican governors before Ronald Reagan had the luxury of dealing with Republican-controlled Legislatures, except for two years during the Depression. There have only been three Democratic governors in this century--Culbert L. Olson, Edmund G. Brown and Edmund G. (Jerry) Brown Jr.--but the Republicans have not controlled the Legislature since 1971. This situation leaves both parties frustrated.

Ironically, divided government matters less in California than in other states, because it is the only state that requires a two-thirds vote on its annual budget. Even so, there are important differences between the parties on issues like the indexing of welfare spending, the need to raise taxes and health care for the indigent. Divided government means that both parties have to compromise their ideal positions in order to get things done.

It is hard for some Democrats and Republicans to accept a future of legislative compromise, and therefore they look for ways to restore unified government. In the immediate post-war period, Democrats felt that the rules of the game were stacked against them. Cross-filing, the so-called federal system that based state Senate seats on counties rather than equal populations, and Republican gerrymandering--all seemed to tilt the playing field of electoral politics in a Republican direction.

Republicans now feel that the positions are reversed. They feel that the incumbency advantage, the caucus-transfer system and that staple of California politics--gerrymandering--retard their chances at realignment.

Term limitations at the national and state levels seem to be the panacea of choice in Republican circles. While political-rule changes do matter, the outcomes, once again, are not always predictable.

Ending the practice of cross-filing in the late ‘50s helped the Democrats field a full slate of candidates, but that did not prevent the California Republicans from dominating gubernatorial elections or from winning some legislative districts with high Democratic registration.

The prevalance of divided government is what distinguishes the modern era of California government from the earlier one. There were only eight years of divided government in the first 66 years of this century, but there have been 14 years of shared control in the last 24.

Parties can dream of realignment and unified control of state government, but the reality for now is shared control. Compromise and bipartisan cooperation will be needed if California is to have constructive solutions to its current fiscal and economic problems without creating new governmental nightmares in the process.