State of Disrepair
Phil Angelides Prescription for Rebuilding California
by Harold Myerson, LA Weekly (Septenber 3-9, 1999)
My friend Jan Breidenbach, who heads the Southern California Association for Non-Profit Housing, figures shes putting in an extra 10 hours a week lately to work on a statewide affordable-housing bond measure that is moving haltingly through the Legislature. State Senate capo John Burton, meanwhile, is lining up support for an $8 billion bond measure to begin the rebuilding of Californias transportation system, while Assembly Speaker Antonio Villaraigosa is carrying a $2 billion bond measure that would enable the state to acquire park land and coastal terrain something the state hasnt done since 1988.
For its part, the California Teachers Association is busily collecting signatures for a state constitutional amendment that would change the requirement for a school district asking voters to approve a bond, from a two-thirds popular vote to a simple majority. Even the Assembly Republican Caucus which historically has supported public funding only for new prisons and bigger nightsticks now has its own plan to boost state spending on infrastructure.
In short, everyone concerned about rebuilding California into a millennial version of the Golden State of the 50s and 60s epicenter of the American Dream, home to the nations finest schools, universities and highways views the Gray Davis era as a historic window of opportunity. Everyone, except just possibly Gray Davis himself.
To date, Gray Davis has largely been absent from the efforts to revive public investment in his state. The return of prosperity, combined with the demonstrable decline of Californias basic public institutions, has led to a decisive shift in public opinion. One recent poll, for instance, showed that 70 percent of Californians would support higher taxes for school construction. But while legislators, activists, academics, and business and labor leaders are working on myriad plans to restore the state to its midcentury glory, the governor is nowhere to be seen. He has convened a Commission on the 21st Century that is slated sometime next year to issue its recommendations for rebuilding the state but in the meantime, in the assessment of one Sacramento veteran, "Theres no sense of leadership from Davis office at all."
Happily, there is one statewide leader whos showing leadership aplenty. Over the past several months, State Treasurer Phil Angelides has made the most comprehensive and convincing case for reviving public investment and reviving it in a specifically progressive manner that California has seen since Pat Brown built the University of California and the freeways, nearly half a century ago. Angelides, who like Davis took office in January, transformed one of his more mundane duties, the annual issuance of a report on the states debt capacity, into an opportunity to lay out a coherent vision not only for reviving public investment in California, but also for building an urban-suburban coalition for sustainable and more equitable growth. The report, a richly detailed, four-color job entitled "Smart Investments," calls on the state to eliminate the two-thirds vote requirement for local bond measures, to stop subsidizing exurb developments that are a 90-minute commute from work sites, and to fund the rebuilding of the inner city and its adjoining working-class suburbs.
"Societies have a life cycle bursts of energy, and then periods of complacency," Angelides told me late last month in the rather grand downtown suite of offices hed inherited from the previous treasurer, Matt Fong. "In simple terms, we made a set of public investments and we sat on our lead."
Until the lead was transformed into a deficit. To be sure, postwar California didnt come cheap. According to the California Budget Project, during the 50s, one dollar out of every $100 of personal income in the state went to building the schools, the roads, the water system. In 1997, that ratio had fallen to a paltry 7 cents per every $100. Ranked ninth among the states for its per capita expenditures on school construction in 1957, California had fallen to 40th in 1994 and there are like declines in state spending on transportation.
A collapse this profound has many causes. Certainly, the Reagan-era belief that government was "the problem" was one factor. So was the growing gap between the increasingly white and aging voting population and the increasingly nonwhite and immigrant population whose children were the students at the states most overcrowded schools. (Indeed, the recent surge in voter support for school construction evidenced by the success of last years Proposition 1-A statewide bond measure, and Proposition BB within the L.A. school district followed closely upon the watershed increase in Latino voter participation that began in 1995.)
But if one culprit stands out in the decline of California civilization as we knew it, its Proposition 13. Howard Jarvis landmark 1978 ballot measure stripped from cities, counties and school districts the ability to fund new proj-ects with the property tax. Instead, local governments were compelled to fund construction and repairs with bond measures whose enactment requires not a simple majority, but two-thirds support at the ballot box.
In a state thats growing by several hundreds of thousands of people each year, this last provision is a prescription for implosion. For fear of rousing Howard Jarvis ghost, most California pols tiptoe around the "two-thirds" issue; Angelides quite rightly insists we can no longer afford to. Last November, his report points out, only 43 percent of local general obligation bonds and 56 percent of school bonds won the required two-thirds vote. If only a simple majority had been required the normal criterion in America the rate of passage would have risen to 83 percent and 98 percent respectively.
And Angelides doesnt stop there: He not only outlines how we can reverse the decline in public investment, but where our investments should go. In the 80s and early 90s, Angelides made his fortune as a developer who adhered to the principles of the "new urbanism" building sustainable communities modeled on the small towns of old, with shops and minimain streets set among the houses, rather than segregated into vast shopping malls. Not surprisingly, his debt report asserts that one criterion for public investment be sustainability, that funneling funds into ever more far-flung suburbs, whose residents have to make ever longer commutes, is a senseless policy. Its not the states role to subsidize sprawl, he insists, or an increasingly dysfunctional car culture. (Every 10 percent increase in miles of new freeway lanes, his report points out, generates a 9 percent increase in traffic after five years.)
"But theres a missing link in the sustainability movement," Angelides says. "We have to focus on the areas left behind. The gap between the two Californias, affluent and poor, is the largest challenge we face." Accordingly, Angelides calls on the state to "focus on the renaissance of older communities, older suburbs. We should prioritize job creation not at the fringe of urban areas, but where people already live in the cities and the inner-ring suburbs." As treasurer, Angelides issues tax-exempt securities for a range of community-development projects, and is one of the directors of the states new Infrastructure and Economic Development Bank and he makes clear that his paramount criterion in both roles will be, in the words of his report, "to support communities at risk or in decline."
By biting so many bullets, Angelides has won widespread acclaim from the whole panoply of public-investment activists in the state from longtime progressives like Breidenbach, to centrist infrastructure-crunchers like David Abel, publisher of the Metro Investment Report, and Times financial columnist James Flanigan. But theres a specifically political dimension to Angelides vision that merits praise as well: He has put forth a broad program that could link the middle-class opponents of sprawl to the working-class champions of rebuilding South Gate and South-Central in a new progressive coalition. If the Dem-ocratic Party wants to have a sustainable majority in California, Angelides has pointed the way.
Problem is, Angelides isnt governor. "He has a bully pulpit and some real power in some limited arenas," says one leading figure in the state investment wars. "And unfortunately little else."
As for our actual existing governor, its not yet apparent if his Commission on the 21st Century will make recommendations that are remotely up to the challenge that Angelides has laid down. Its not that Davis doesnt understand the public-investment problem. "This guy has a frighteningly good grasp of all these issues, with a huge level of detail," says one gubernatorial confidant. "He knows this stuff down to the nth degree. But whether he can delegate tasks here, or get his people working in the same direction, or talk to the voters of the state on this issue I just dont know.
"If you had a combination of Angelides and Gray somebody with real power, who knew the issue and how to use a podium youd have a great governor."
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Speaker's Commission on State/Local Government Finance