Failing Finance due to Excessive Direct Votes

Known as the “Golden State,” California, which is symbolized by vast orange farms, Hollywood and Silicon Valley, is in a state of great disorder as residents are planning to go to the polls October 7 to decide whether or not to hold the governor responsible for the 38.2 billion dollar state budget deficit. How did California reach the current state of insolvency, when it is regarded as the “richest region on earth?”

The BBC and the Economist reported that a reduction in tax revenue, caused by the waning high-tech IT industry in California and the collapse of the bubble economy, was one of the causes. However, they pointed out that politicians who remained idle during times of economic difficulty, along with California`s direct democracy that started to expose weaknesses in the first place, were the main culprits for the deficit.

The Economist pointed out that numerous laws which support direct democracy, such as enacting laws according to residents` proposals, holding resident polls on the laws enacted by Congress, and allowing residents to summon public officials, have been passed, but that operational problems are emerging.

Among 626 proposals made by California residents between 1980 and 2000, 123 were put to a vote. The number of proposals made during that twenty-year period exceeds the number of proposals put to a vote in the seventy years before 1980. Four votes were cast on the issue of automobile insurance in 1988, and 43 laws were put to votes in 2000 in Los Angeles alone.

Residents are flooded with a vast amount of information and advertisements for every poll. In some cases, voters will head to the voting booths without any knowledge whatsoever on the issue at hand. Millions of dollars are poured into certain proposals, with millionaires even manipulating the process at times.

The Economist also reported that although no concrete evidence was actually found to hold governor Gray Davis responsible for the deficit, and therefore justification to hold a residents` vote, there is speculation that millionaire Darrell Issa, said to have his eye on the post of California governor, is behind the scheme, with financial support being provided from Republicans Representatives.

The L.A. Times reported that politicians from New York and Missouri are campaigning to receive 1 dollar for every person that signs the proposal for the summons, as a huge amount of tax money is required for every poll. In fact, 30 million dollars is expected to be spent on the poll to hold the governor responsible for the state budget deficit alone.

In California, 70% of the budget is set aside for residents` proposals on laws, leaving only a small amount for the state government to operate with. The Economist also pointed out that another problem for California is that most legal proposals made by residents tend to head toward lesser tax payment and greater public expenditure for the state government.

The BBC commented that “the state of California`s problems might be arising from the residents rather than the state government,” and said that “the residents must face the reality that lowers taxes and greater public expenditure will inevitably lead to financial deficit, and must come to a decision.”

Ki-Tae Kwon kkt@donga.com