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California voters are enthusiastic about President Obama’s plans for steering the country out of recession, but their faith in state government’s ability to manage its finances and fix California’s problems has tumbled, according to a new poll.

The survey by the Public Policy Institute of California found that three in four Californians think the state is going in the wrong direction, a record high number. The budget problems have dragged the approval rating for Gov. Arnold Schwarzenegger to 40% -- the level it reached after his politically disastrous special election in 2005. The Legislature has sunk to a 21% approval rating.

Most respondents support raising some taxes to help ease the state’s financial crisis. Schwarzenegger’s proposals to temporarily increase the sales tax by 1.5 cents, hike vehicle license fees by $12 and raise alcohol taxes by roughly a nickel a drink were all supported by a majority, with the alcohol levy the most popular.


And for the first time during the Schwarzenegger administration, a majority supports doing away with the requirement that two-thirds of the Legislature approve state budgets. That standard has allowed lawmakers in the minority Republican Party to routinely block spending plans.

At the same time, voters express broad support for a signature Republican budget proposal. More than two-thirds of the 2,001 state residents polled by the independent research organization favor strict limits on how much state government grows each year. Champions of such restraints say they would prevent the state from overspending in flush times, leaving money in state coffers to wipe out deficits when they arise.

“People feel things have gotten way out of hand,” said PPIC survey director Mark Baldassare. “We are back to the same problems we had in 2003. The enormous gap between revenues and spending makes them think we have to put something in place so we don’t get in this crisis situation again.”

The poll, conducted with funding from the James Irvine Foundation, comes as the cash-strapped state prepares to suspend billions of dollars in tax refunds and other payments, and lawmakers have yet to agree on a plan to close a deficit projected at nearly $42 billion by the middle of next year. A further downgrade of the state’s bond rating -- already tied with Louisiana for the lowest in the nation -- is likely soon, absent a budget agreement.

Political analysts say the state mood is similar to what it was in 1978, when anti-tax activists capitalized on widespread anger over lawmakers’ failure to address soaring property taxes. That year, voters passed Proposition 13, which limits how much those taxes can grow.

“We have another situation here where there is a major problem, and the Legislature is refusing to do anything about it,” said Allan Hoffenblum, publisher of the California Target Book, a service that tracks and analyzes legislative races. “The frustration is at a level where the voting public could be demagogued into doing some drastic things in the way the Legislature operates.”


Schwarzenegger, speaking to reporters at a luncheon in the capital Wednesday, said he believes the approval ratings of state politicians will bounce back once an agreement that wipes out the deficit is reached. He expressed confidence that such an agreement is days away.

Asked about the poll findings, he said: “The important thing for us is to stay focused, not to look at that but to look at the end result. . . . If we succeed, and I think that we will, I think that we will have done something historic, and I think the people of California will appreciate that.”

That may be overly optimistic, Baldassare said. He noted that his poll suggests voters are tired of what they see as a process that has broken down. The budget lawmakers passed in September was the latest in recent history, and as a result hundreds of thousands of individuals and service providers went for months without payments the state owed them.

That spending plan then fell apart within weeks, and a huge deficit reemerged. Lawmakers are about to conclude their third emergency legislative session on the budget since November.

“These [low] approval ratings are likely to linger for a while,” Baldassare said. “People are not happy about how long this has taken and the risks that were created.”

The survey suggests voters have shifted their hopes for progress toward Washington. That is a stark turnabout from a couple of years ago, when Californians were optimistic that the governor and Legislature would get things done at a time when they felt Washington was falling down on the job.


Of those polled, 79% said Obama would be a strong and capable president, and 81% believe he and Congress will be able to work together to accomplish a lot -- even as large majorities believe bad economic times are ahead and worry that they will suffer personally. The president’s proposal to stimulate the economy with billions in public works spending, state assistance and tax cuts is popular with Californians, 57% of whom say they are satisfied with it.

“When Obama listens to Republicans he may not agree with, people at least see the potential for civil discussion,” said Heidi Gantwerk, a policy analyst working with California Forward, a think tank focused on improving state government. “It is so absent in Sacramento.”

Last spring, Gantwerk collected the detailed views of scores of voters, who participated in daylong discussions on the budget held throughout the state.

“People just feel the whole system in Sacramento is badly damaged,” she said.



Times staff writer Michael Rothfeld contributed to this report.