THE TIMES POLL : Regulations, Taxes Blamed for State’s Woes

With their state mired in recession, Californians blame high taxes and too much regulation for the poor business climate and would accept relaxed environmental rules if that would keep companies from fleeing the state, the Los Angeles Times Poll has found.

The poll indicates that Republican Gov. Pete Wilson and members of the California business community have been successful in promoting the idea that high taxes and punitive state regulations are a major cause of California’s economic woes.

Although Californians are worried about the quality of the environment--which many see as declining--the economy and jobs led the list of the most important problems facing California today. The environment was mentioned by only 2%.

And even though Californians think taxes are too high, a surprising 68% said they favor extension of the temporary half-cent sales tax, imposed in 1991, to help balance the state budget.

This view supports the argument of Democratic leaders in the Legislature that the special tax should be extended for another year to help offset the new budget deficit. Wilson has been adamant that the levy be allowed to expire as scheduled on June 30.

When it came to the state of business in California, however, almost three in five of those polled agreed that taxes are too high and there is too much regulation.

Nearly the same number--57%--responded positively to the question: “Would you be willing to limit some of the environmental regulations California places on businesses if that would keep businesses and jobs from leaving the state or not?”

As might be expected, Republicans and conservatives were most insistent that high taxes and excessive regulation were at the root of a poor California business climate. But there also was substantial support for that view among Democrats and liberals. Fifty percent of the registered Democrats said they were willing to limit some environmental regulations if that would keep business and jobs from moving to other states.

An increasing number of Democrats in the Legislature have joined the bandwagon this year for easing burdens on business.

Californians were not specifically asked which environmental rules they might be willing to relax. But the poll showed there is stronger sentiment for this in Southern California than in the San Francisco Bay Area, traditionally a center of environmental activism.

The most intense public discussion in the Los Angeles area the past year has been over an array of anti-smog rules imposed by the South Coast Air Quality Management District. In the Los Angeles region, 60% of the respondents indicated they were agreeable to a relaxation of environmental strictures to help business while 32% were opposed. In the Bay Area, the margin was 50% to 43%.

The Times Poll interviewed 1,294 California adults Saturday through Monday. The poll has a sampling error of plus or minus 3 percentage points.

The case for regulation and taxes as the cause of business flight has won support even though there has been no significant increase in state business taxes in recent years and in spite of some studies questioning whether there has been an exodus of business to other states because of California taxes and regulations.

While California continues to lead the nation in unemployment, much of the state’s job loss in the past several years has been attributed to layoffs by defense-related industries that have lost federal contracts and to a decline in the construction industry.

Although the respondents most often mentioned high taxes as the biggest problem facing business in California (45%), a considerable number (33%) listed the economic recession, the same percentage as for business regulation. About one-fourth each also said that the cost of workers’ compensation and competition from foreign business were big factors.

Each person polled was allowed two responses when prompted with a list of potential business problems.

There was considerable agreement--78%--that business leaving California is a major problem.

On a separate question on workers’ compensation, 79% said they would back stricter limits on some claims brought by employees against employers stemming from job-related injury or illness, if that would keep business and jobs from leaving California.

Times Poll Director John Brennan noted that although Wilson and other Republicans have been successful with their arguments, they are reaping little political gain from the increasingly pro-business, anti-regulation mood of the public.

Those who believe business is overregulated disapprove of the job Wilson is doing by 58% to 34%, Brennan said. The margin of disapproval is almost identical among those who think business taxes are too high.

These same pro-business poll respondents split over whether the Democratic Party or the Republican Party can better handle the state’s problems.

These perceptions, if unchanged, could become important as California approaches another critical election year. Few economists are confident of a significant turnaround in the California economy before 1994, when Wilson will be seeking a second four-year term.

Poll respondents also sent mixed signals when asked about the ongoing state budget crisis and how to solve it.

An increasing number say the quality of services they get from state and local governments are inadequate. Still, a majority thought that even more reductions in state programs might be needed to balance the budget. And 55% said higher taxes may be necessary.

Asked what actions would be “necessary” to balance the budget, 41% said mostly program cuts, 25% mostly taxes, and 26% an equal combination of the two.

In the long run, however, most Californians thought that higher taxes were a greater evil than further reductions in essential state services.

The question was phrased this way: “In your view, what is the greater danger for California right now: that state spending has been cut to the point where essential government programs and services will be threatened, or that taxes have been raised to the point where people won’t be able to handle the burden?”

Sixty percent said the tax burden was the greater danger while only 29% listed cuts in essential services and 11% said they did not know or did not respond.

Given the option of what services to cut, the most often mentioned spending item (34%) was welfare. Respondents were most protective of education (42%) when asked which programs should not be cut, or should be cut the least. These views are consistent with priorities expressed in past polls.

Brennan said it is not unusual for respondents to seem to contradict themselves when answering a long and complicated series of questions--as when they deplore the condition of the environment but seem willing to sacrifice it to a degree to help business.

“State leaders will not find the solutions to their problems simply from polling the public,” Brennan said. “Unlike policy-makers, the public has the luxury to contradict itself on major issues and the right to react negatively to whatever decisions leaders make.”

What the poll results do indicate is the magnitude of the challenge state leaders face in framing solutions to such complex problems as the state budget deficit that can win broad public and political support.

“With the public so schizophrenic, even the wisest political leaders will have a hard time getting a consensus for action,” Brennan said.

In other findings:

* Generally, Californians remain satisfied with the communities in which they live (70%), but 37% detect a decline in the quality of life in those areas.

* In spite of the pro-business attitudes expressed by many in the poll, 59% still think that growth and development should be controlled or slowed, even though that might result in the loss of some jobs in their communities.

* Californians were split on a question pitting business concerns against the threat to endangered species. Forty-seven percent said they were sympathetic to concerns about wildlife, while 44% sided with business.

* Only 37% of California’s motor vehicle owners favor the concept of a “pay-at-the-pump” program to provide universal auto insurance; 56% were opposed.

How the Poll Was Conducted

The Times Poll interviewed 1,294 adults statewide by telephone from March 20 to 22. Telephone numbers were chosen from a list of all exchanges in the state. Random-digit dialing techniques were used to ensure that both listed and unlisted numbers could be contacted. Results were weighted slightly to conform with census figures for sex, race, age, education and household size. Interviewing was conducted in English and Spanish. The margin of sampling error for the total sample is plus or minus 3 percentage points. For certain subgroups the error margin is somewhat higher. Poll results can also be affected by factors such as question wording and the order in which questions are presented.

THE TIMES POLL

Californians on the Environment and Business Regulation

Majorities of Californians rate the state’s environmental quality and business climate negatively. But a growing number think it is business that is overregulated. Most also say business taxes are excessive. How would you rate the quality of California’s environment today? (March, 1993)

Excellent: 3%

Good: 35%

Not so good: 41%

Poor: 20%

Don’t know: 1% How would you rate California as a place to do business? (March, 1993)

Excellent: 7%

Good: 31%

Not so good: 36%

Poor: 23%

Don’t know: 3% Which of these, if any, do you think is the most important problem facing California business today? (Two responses accepted.) (March, 1993)

High taxes: 45%

Excessive regulation: 33%

The recession: 33%

Workers’ compensation: 26%

Competition from abroad: 24%

Poor quality of life: 9%

Other: 3%

Don’t know: 4% Do you think taxes on businesses in California are too high, too low or at just about the right level? (March, 1993)

Too high: 58%

Too low: 7%

Right amount: 23%

Don’t know: 12% Do you think there is too much, too little or about the right amount of government regulation of business and industry in California? (March, 1993)

Too much: 58%

Too little: 12%

Right amount: 21%

Don’t know: 9% (Dec., 1991)

Too much: 38%

Too little: 24%

Right amount: 21%

Don’t know: 17% Which comes closer to your opinion: Business has legitimate gripes about state regulations that hamper job growth, or Business is using the recession and threats to leave to try to get regulations it doesn’t like repealed. (March, 1993)

Legitimate gripes: 57%

Using recession/threats: 32%

Neither: 2%

Other: 1%

Don’t know: 8% SOURCE: A Los Angeles Times poll of 1,294 adults statewide from March 20-22. Margin of error for the entire sample is plus or minus 3 percentage points.