The Rodda Project

0001: Sen. Rodda in Wikipedia

2011-12-18T09:00:00.000-08:00

In 2011 the on-line encyclopedia Wikipedia added a biography of Sen. Rodda to its entries. The original article declared that Rodda was appointed to the Commission on State Finance by Gov. Jerry Brown, but in reality the appointment was at the disposition of State Treasurer's Jesse M. Unruh. The writer also seemed to think that the Los Rios Community College board of trustees named Rodda Hall on the Sacramento City College campus in recognition of his service as a fellow Los Rios trustee; in fact, the naming of Rodda Hall in the Senator's honor preceded his tenure on the Los Rios board. Both of these oversights in the Wikipedia article have been corrected and we can now await further developments as others may contribute to the Senator's biography. A more extensive account of his life is presented here, on this blog.

The Gann Limit & Proposition 13 (1987)

2010-08-27T20:00:00.000-07:00

The Rodda Project: Echoes of the tax revolt

In 1987, Albert Rodda was a member of the board of trustees of the Los Rios Community College District. Back in a academic environment that included Sacramento City College, where he had once been a faculty member, Albert became accustomed to people calling him “doctor” more often than “senator.” Nevertheless, it was his political experience even more than his academic background on which he drew in analyzing the affect of the Gann limit on local government agencies. As a system of public education, the Los Rios district was naturally concerned by the likely negative impact of the Jarvis and Gann initiatives on its ability to find the budgetary resources necessary to maintain its growing education program.

The Senator's paper was published in October 1987 as a 23-page booklet for the use of his fellow trustees and other interested parties. The following text comes unmodified from the booklet's pages, except that I converted Rodda's footnotes into endnotes and recreated two one-page graphs that the Senator originally drew by hand.

—TB

Gann Limit & Proposition 13:
Negative Effects on Local Government Agencies, Including School & Community College Districts

Albert S. Rodda, Ph.D.
Los Rios Community College District
Board of Trustees
October, 1987

Part I — Gann Limit Deficiency
Part II — Impact of a Prudent Reserve
Part III — Gann Limit and Revenues
Part IV — Gann Signature Petition

You are informed, I know, about the problems relating to the Gann Limit. This paper includes an analysis of problems which relate to Proposition #13. The relation between the two is discussed and might be of interest to you.

Part I — Gann Limit Deficiency

In the Fall of 1978, Paul Gann, who worked with Howard Jarvis to gain voter approval of Proposition #13 in June of 1978, sent out a letter of solicitation for signatures to qualify a second constitutional amendment initiative for the ballot in 1979. The objective of the initiative was to place a constitutional limit on government expenditures, state and local, in California. It qualified and was approved in November 1979 and is identified as Proposition #4.¹ In his solicitation, he stated that 1978-79 would be the base year for the limitation and that annual increases in the Appropriation Limit, as it was defined, would be no greater than the "changes in the Consumer Price Index (U.S.) plus population," and this language was interpreted by the voters to be the essential provision of the initiative when they approved it on November 6, 1979. It was expected, therefore, by those who signed the initiative petition that the future per capita government expenditures would be equal in real dollars to the level which was provided in fiscal year 1978-79, since the annual adjustments would reflect the change in the cost-of-living.

Inadequate attention was given to all of the material that Gann circulated, including a draft of the proposed initiative which contained the following language: “... cost-of-living shall be...the Consumer Price Index for the U.S. as reported by the U.S. Department of Labor or successor agency of the U.S. government; provided, however, that for purposes of Section I, the changes in the cost-of-living from the preceding year shall in no event exceed the change in California per capita personal income from the preceding year.”

Since that language was identical to the initiative approved by the voters, the initiative placed a restriction on the annual increase in the Gann Appropriation Limit which has failed to conform to the intent as stated in the "Spirit of 13, Inc." signature solicitation petition. The reason for that deficiency is that for three years, 1980-81, 1981-82, and 1983-84, the increase in per capita Personal Income was lower than the percentage increase in the Consumer Price Index and the annual growth in the Appropriation Limit, therefore, was lower than the increase in the cost-of-living and the increase in population promised in the solicitation.

In 1986-87, six years after the initiative became effective, the Gann Limit factored out at $23.8 billion and reflected a 90% increase over the 1978-79 base year. In the same year, if the formula used to determine annual increases had been, as stated by Gann in his letter of solicitation, the CPI and Population, the Appropriation Limit would have been $25.3 billion or a 102% increase. The net difference between the two amounts to $1.5 billion, which means that had the changes in the CPI been utilized in the calculation the dollar amount of the 1986-87 Gann Appropriation Limit would have been 6% more than the Gann Limit which became effective in that year.

If the Gann formula had been adjusted for changes in Personal Income and population growth alone, the state's Gann Limit would have equalled $28.7 billion for 1986-87, an increase equal to 130% and the net dollar difference would have been $4.9 billion. Such a level, if established for the Gann Limit, would reflect, not only inflation and the population increase, but the 1mprovement 1n the state s economy because of economic growth, since the Index of Personal Income is a measurement of changes in the personal income experienced by the citizens as a consequence of changes in the state's economic productivity.

Another meaningful index is the Implicit Price Deflator for State and Local Government Purchases, which is a measurement of annual changes in the cost of purchases made by the state and local segments of government. If the Gann Limit formula had been adjusted annually to reflect the Implicit Price Deflator (IPD), the limit in 1986-87 would have amounted to $26.1 billion, or 3% greater than the Gann Limit, or a difference in the amount of $800 million.

When calculated on a per capita basis, the Gann Appropriation Limit factored out at $882 in 1986-87 and when calculated on the basis of increases in the CPI and population, it amounted to $937. An even more dramatic difference prevails, however, when a comparison is made between the Gann formula and annual increases based exclusively upon annual percentage changes in Personal Income and the population. On the basis of such a calculation, the per capita Gann Limit would have been to $1,060. If the Implicit Price Deflator were used, the per capita Gann Limit for 1986-87 would have been approximately $974.

It must be recognized that fiscal year, 1986-87, was a critical year, since it was the first year that the state was required to comply with the Gann mandated tax rebate, a rebate in the amount of approximately $1.1 billion. It is interesting, however, that while the state, because of a favorable revenue situation, is spending at the Gann Limit level, many agencies of local government and local school districts, including community college districts, will have to operate under 1987-88 budgets which will be below the appropriations authorized by the Gann Limit. The Los Rios Community College District, for example, is estimating that the district will be compelled to operate under a 1987-88 budget which will authorize expenditures approximately 7.2% less than allowed under the district's Gann Limit. In dollars, the difference amounts to approximately $5.3 millions. This problem, one of a revenue deficiency, is proving quite serious, and I will discuss it in detail in Part III of this paper.

Absent voter approval of a constitutional amendment which changes the Gann formula, this situation with respect to the state and local agencies of government will become even more severe in the future, and it will become even worse if the economy experiences another period of stagflation, which is the term used to describe an economic condition in which there is an economic recession during a period of price inflation. During such difficult economic circumstances the Gann Limit will not increase at a rate equal to the depreciation of the dollar, or inflation as measured by the Consumer Price Index.

In considering a change in the formula, the minimum correction should be one that provides a formula which will, in the language of the Gann solicitation, adjust each year's Appropriation Limit so that it reflects “... changes in the Consumer Price Index (U.S.) plus population.” The enclosed charts reflect the difference between the Gann Limit as calculated on the basis of different measurements of changes in the economy—inflation and economic growth.²

Part II — Impact of a Prudent Reserve

An interesting aspect of the impact of the initiative is that it allows agencies of government to maintain prudent reserves against unforeseen economic circumstances and contingencies but it does not allow the reserves to be maintained outside of or above the Appropriation Limit. The result is, therefore, to accentuate the adverse effect of the Gann Limit upon real dollar state government expenditures. The reason is that when the base year, 1978-79, was determined, the state was involved in the Proposition #13 bailout of local governments and the schools in an amount equal to about $4.4 billion, which provided a partial offset of the $7 billion lost because of the effect of the initiative upon local property tax revenues. The slate did not include a Prudent Reserve in its budget appropriations, and, therefore, the surplus it carried forward into the next year was not a part of the base year Gann Appropriation Limit calculation. The calculations for the base year resulted in a Gann Limit equal to $12.5 billion which was equal to the state's total appropriations for that year. Today, when the state budget includes a surplus or Prudent Reserve, it is considered apart of the state budget and is included in the state appropriations which are subject to the Limit. The result is that the state Prudent Reserve reduces the appropriations which may be authorized to fund government services under the Limit by an amount of dollars equal to the dollars set aside as a reserve.

Because of Governor Deukmejian's experience with the 1982-83 state budget revenue shortfall in his first year as Governor, he has been adamant in his determination to set aside a minimum of approximately $1 billion in the form of a reserve against unanticipated contingencies. Since this $1 billion reserve has been provided in the 1987-88 budget and is calculated under the Gann Limit as a state expenditure, it compounds the problem the state is experiencing in adjusting to an expenditure control which, as I have calculated, is approximately $1.5 billion below what it would be if measured against a Limit which reflected changes in the CPI and population.

When these two negatives are added together, it is clear that the Gann Appropriation Limit is approximately $2.5 billion less than the amount necessary to assure the state that the per capita real expenditure in 1978-79 is maintained in 1987-88, nine years later. It amounts to about a 10% erosion in 1978-79 dollars.

It is only reasonable to argue, therefore, that the Gann Appropriation Limit should be changed in order to permit the maintenance of a responsible Prudent Reserve Against Economic Uncertainties which is outside and not within the Appropriation Limit. In fact, such a change is now being supported by Gann and his associates.

Part III — Gann Limit and Revenues

An interesting aspect of the current fiscal situation is the relation of government revenues to the Gann Limit, one which varies significantly among agencies of local government, cities and counties, and school districts, K-14. Some are close to their limits and others are significantly below their limits.

And while this fiscal confusion prevails at the local level and can be expected to continue into the future, the state, because the elasticity of its revenues³ exceeds the elasticity of the state Gann Limit, can be expected to experience revenue surpluses in the future which may not be utilized to finance state government programs. Many school districts, cities and counties, however, will be mired in an impossible situation—inadequate Gann Appropriation Limits and revenues below those necessary to finance educational and government services authorized by the Gann Limit levels.

The problem confronting local governments, of course, is directly related to the fact that their revenues, especially property tax revenues, are less elastic than their Gann Limits, which despite the acknowledged deficiency in the Gann formula in adjusting for inflation and population changes will increase at a more rapid rate than revenues, unless, of course, some changes are made in the state's fiscal and revenue structure, state and local.

Revenues at the state level are currently exceeding the Gann Appropriation Limit, a change from the pattern which prevailed during the first seven years of the Gann Limit, 1979-80 through 1986-87. In the first year of the implementation of Gann Limit, 1980-81, the state was meeting its budget expenditures through the use of carryover surpluses to supplement tax revenues which were not producing a level of state income equal to the Gann Limit—a condition which continued during the early eighties because of the adverse effect upon tax revenues of the recession experienced by the economy. As late as last year, the state's revenue deficiency was expected to continue through 1986-87 and possibly into 1987-88. To the surprise of the Deukmejian administration experts in state finance, who were making such predictions, the economy improved and generated a substantial increase in state revenues over the amount projected for 1986-87 and 1987-88. Unfortunately, because of the inability of the Legislature and the Governor to agree on the way in which the revenue increase should be utilized in the 1987-88 budget, appropriate legislation was not enacted, and the state, therefore, was confronted with a situation in which revenues in fiscal year 1986-87 exceeded the estimated Gann Appropriation Limit in the amount of approximately $1.1 billion dollars, including a reserve in the amount of $571 million. It is estimated that the state budget for 1987-88 will be within the Gann Limit and will include a Prudent Reserve of about $1.0 billion.

Had a compromise on the issue been achieved, a substantial portion of the state Gann Limit excess could have been allocated to local agencies and local school districts, K-14, in the form of state subventions which would be included in the local and not the state Gann Appropriation Limit.

As a consequence of the partisan political impasse, significant state tax revenues are being returned to the taxpayers, beginning in November of this year, while many agencies of local government and school districts, K-14, will have to cope with serious, if not almost impossible, budgetary problems.⁴ The history of the current fiscal situation for state and local governments is interesting. Unfortunately, the problem is not only serious, but it is quite complicated, and any substantive reform will prove controversial.

During the seventies a powerful tax revolt movement developed in the state and, as a consequence of the desperate need for the state to respond, the Legislature placed before the voters a property tax relief-reform statute which would have reduced property taxes thirty percent across the board, provided greater relief for senior citizens who were home owners or renters, and required the state to assume the local costs of SSI-SSP, Medi-Cal and AFDC. The proposal was rejected by the voters in favor of Proposition #13, which imposed upon local governments and the schools, K-14, a $7 billion reduction in property tax revenues. Since the result would have been devastating for fiscal year 1978-79, the state committed itself to a one-time bailout of local government and school districts. In the following year, the bailout was made ongoing through the enactment of AB 8, Greene. As apart of that legislation I approximately $800 million in local property tax revenues were shifted from the schools, K-14, to other local agencies of government.

One of the consequences of that action was to make the schools, K-14, more dependent upon the state for funding and to increase local governmental dependence upon the local property tax revenues. In those areas where there has been growth and development the fiscal situation has been favorable to the cities and counties; however, in those areas where there has been an absence of such development, the fiscal consequences of Propositions #13 and AB 8 have been unfavorable and current statistical data indicate that local agencies of government are suffering financially, and many now have annual revenues which are significantly below their Gann Appropriation Limits.

This, of course, is a result of the fact that under Proposition #13 when new construction is taxed, the property is assessed at the current market value, which is true also of property which changes ownership, but all other property is assessed annually to reflect only a 2% increases, the base year being the 1975-76 assessed value. Local revenues, therefore, in slow growth areas are increasing only at a modest rate and one which is not equal to the rate of increase in the Gann Limit.

Absent a determination on the part of the state to recognize this problem, local public services in areas of the state where there is a slow rate of growth will suffer seriously.

Voters may, under the provisions of Proposition #4, increase the local Gann Limit, but a voter approved expenditure limit increase may continue only for four years unless approved a second time by the voters. Any such action taken by the voters, therefore, will amount to a band-aid approach to a serious fiscal issue confronting those segments of government which are not experiencing favorable economic growth.

A change in the Gann Limit formula, though warranted, will not benefit local governments in slow growth areas, since the current problem is not a deficient expenditure authorization. It is a deficient revenue source. Unless the revenue situation improves, a greater annual increase in the Gann Appropriation Limit, resulting from a change in the formula, will merely widen the gap between revenues and the Gann appropriation authorization. Of course, those agencies of government in rapid growth areas will benefit, since they will be able to spend revenues they receive but may not appropriate under the current formula.

The fact of reality is that whereas the state will exceed the Gann Limit this year, 1986-87, and will return $1.1 billion to the taxpayers, most local agencies of government and school districts, K-14, are receiving cumulatively revenues, on the whole, below the Gann Limit. The difference varies, of course. Some counties and cities are spending at a level close to their Gann Limits and suffer primarily from the inadequacy of the Gann Limit formula to reflect adequately changes in the real value of the dollar. They would benefit from a change in the Gann Limit formula which made it reflect more realistically annual changes in inflation.

The state of California is fairly immune from this adverse fiscal circumstance in view of the fact that its revenue situation has not suffered a serious deterioration since 1978, the year Proposition #13 was approved by the voters.

The reason is that the state is not dependent upon the property tax for revenues. One adverse effect of Proposition #13 upon the state, however, was the fiscal burden it had to assume in order to bailout the schools and local agencies of government. Subsequent to Proposition #13, the voters approved two initiatives which virtually repealed the Inheritance and Gift tax and required the full indexation of the Personal Income tax. That action reduced the annual rate of growth of state revenues, but it has not been significantly adverse, at least as of now. State revenues are now less elastic than they were in the seventies but they still exceed an elasticity of unity, or 1.0, when the condition of the economy is favorable. And, of course, because of the reduction in the level of authorized state expenditures resulting from Proposition 114, the Gann Limit, state revenues are adequate to finance the state budget. During a period of economic recession, there is a potential for a revenue deficiency and that aspect of state finance warrants the maintenance of a Prudent Reserve, but the situation is not one which may be referred to as “Gloom and Doom,” as is the case with respect to a number of counties and some school districts.

During the seventies state revenues increased at a rate greater than that of Personal Income and the elasticity was greater than 1.0, sometimes as high as 1.1. Excluding several exceptional years during the seventies, revenue calculations indicate an elasticity in the magnitude of about 1.35. During the early years of the Reagan administration, however, when the national economy was in recession, the elasticity declined to about .7, or became inelastic. Today, because of improved economic conditions, state revenue elasticity is greater than unity, approximately 1.1, and is estimated to remain at that level until the economy experiences a decline with the onset of a recession, at which time it can be expected to decline below unity, possibly, depending upon the severity of the cyclical change in the economy, to a level of .7 or .8.

Different revenue sources have different elasticity. The state personal income tax tends to be more elastic than other state taxes. The corporate income tax tends to be elastic but it is a much smaller revenue source. The general sales tax is elastic during periods of economic growth, but sin taxes, those on alcohol and tobacco products, are inelastic, as is the gasoline tax per gallon. The revenues from these taxes are directly related to the number of units sold and that accounts for the lower elasticity.

Since the personal income tax and the tax on corporate income together constitute a large percentage of the revenues received by the state, state revenues tend to be relatively elastic and to provide a reasonable source of total revenues, especially during a period of economic expansion and inflation.

These conditions do not prevail at the local level of government, especially counties and school districts, where tax revenues are related to the local property tax. Prior to Proposition #13, the local property tax tended to be moderately elastic, but because Proposition #13 limits annual increases to 2% of the value of the property, the base year being 1975-76, property tax revenues have lost considerable elasticity, especially in those areas where there is not a high rate of property transfer and modest real estate development.⁵ In such areas local governments do not have a tax or revenue base which increases annually at a rate which reflects inflation and normal increases in the cost of providing government services. It is largely because of this condition that cities, counties, and school districts are experiencing difficulties: one, due to the inadequacy in the Gann Appropriation Limit, and, two, due to the failure of property tax revenues to increase at a rate adequate to finance government services. As indicated above, the problem is worse, in fact very serious, in those geographical areas where there is a low rate of economic development, primarily agricultural and timber producing regions. In areas where enrollment declines are experienced by the schools, K-14, the fiscal situation is made even more negative because revenues from the state are based upon average daily attendance, ADA, as is the Gann Appropriation Limit. Thus, when ADA declines, total school revenues will decline or become stable, depending upon the cost-of-living or COLA adjustments provided through the state funding formula. Of course, the situation varies from area to area; nevertheless, the fiscal situation confronting many school districts and non-growth counties is quite critical. Unfortunately, the local agencies of government and the schools have no power to respond to the situation.

For some counties and special districts, the situation is quite negative because the state does not automatically compensate for property tax revenue declines or inadequacy.

Such a condition can compound over time and, as a result, controlled expenditures which are funded significantly from local revenues may increase at a much lower rate than the rate of increase authorized by the local Gann Appropriation Limit. This can account for the development of a sizeable gap between authorized expenditures and the revenues available to finance them, an unfortunate circumstance which a number of counties have experienced.

Statistical data indicate this situation to prevail in some areas of the state. For example:

Siskiyou in 1984-85 was funded at 66.5% of its Gann Limit and is estimated in 1986-87 to be at a 61.5% level.
Stanislaus in 1984-85 was funded at 63.5% of its Gann Limit and is estimated in 1986-87 to be at a 59.9% level.
Yolo in 1984-85 was funded at 59.9% of its Gann Limit and is estimated in 1986-87 to be at a 57.3% level.
Lassen in 1984-85 was funded at 63.5% of its Gann Limit and is estimated in 1986-87 to be at a 57.8% level.

Similar data relating to counties located in growth areas indicate expenditures equal to a higher percentage of the Gann Limit.

	1984-85	1986-87
San Francisco	95.1%	86.9%
Kern	100.0%	97.2%
Orange	88.0%	92.5%
San Bernardino	87.9%	99.5%
San Mateo	86.2%	92.3%
Solano	92.6%	94.0%
Sonoma	94.4%	98.0%

Shasta County has closed and terminated its countywide library system. The County Supervisors are claiming a $2.6 million shortfall in the county's 1986-87 budget. Butte County is planning to take the same course unless the cities in the county agree to contribute to the support of the library system. Butte County is calculating a revenue shortfall equal to $7.3 million in 1987-88 or 23.6% of its Gann Limit. Tehama is interesting since it has announced that it is bankrupt and that it will be unable to continue providing basic county government services. In 1984-85 the Tehama county limit was $11.7 million and appropriations were $9.6 million, or 82% of the Limit and a shortfall of $2.5 million. In 1985-86 the Tehama County Gann Limit was $12.5 million and appropriations were $10.1 million or 81% of the Limit. The shortfall was $2.37 million. There is no current data available, but it is evident that the fiscal situation is even more negative.

In 1986-87, the aggregate dollar deficiency was serious for those counties which were well below their Limits. The deficiency for El Dorado was $12.6 million and its Limit was $40.1 million; for Siskiyou, it was $2.8 million and its Limit was $14.1 million; for Trinity, it was $3.3 million and its Limit was $7.8 million; for Tuolumne, it was $9.5 million and its Limit was $21.7 million; for Yolo, it was $19.6 million and its Limit was $46.4 million and for Alpine, it was $2.1 million and its Limit was $3.5 million.

Sacramento County had a Limit of $201 million and a revenue deficiency of $31.7 million, or 15.8% below its Limit.

For the year, the total of the fifty-eight county appropriation limits equaled $6.37 billion; total revenues available to finance expenditures, however, equalled $5.59 billion. The revenue shortage for all counties amounted to $783 million, or a deficiency of 12%.

Similar fiscal problems confronted school districts which had revenues less than or below the Gann Limit, including community college districts.⁶

The percentage of revenues to district Gann Appropriation Limits for 1985-86 for community college districts indicated the following:

North Orange was 58%; Victor Valley was 57.5%; West Kern was 55.1%; Fremont-Newark was 54.7%; Gavalin was 51.8%; Yuba was 50.8%; San Jose was 45.8%; Yuba was 50.8%; Butte was 42.8% and Mt. San Jacinto was 34.1%.

Of course, some districts were experiencing more favorable fiscal situations: Merced was 97.1% of its Limit; Imperial was 95.6%; Palo Verde was 95.5%; Riverside was 92.0%; Allan Hancock was 87.6% and Los Rios was 88.3%.

What these statistics for the community colleges fail to indicate is the disparity that prevailed then and continues to prevail with respect to district revenues per student. For example, the difference, not counting the small districts which have greater expenditures per student, was $870 per student or 35% of the average, which was $2,430 per ADA. West Kern, a wealthy and small district, for example, was spending $6,684 per ADA.

When the entire community college system was taken into consideration the statistical data for 1985-86 indicated that revenues available to all of the 70 districts were equal to approximately 70% of the aggregate Gann Appropriation Limit. The Limit authorized approximately $2.3 billion in expenditures, but the revenues available to the districts equalled approximately $1.6 billion. The shortfall was in the amount of $700 million and it is evident that a similar fiscal situation will confront the community college districts this year, 1987-88, though it will be less serious because of the increase in ADA. The Los Rios shortfall is expected to decline from 12% in 1985-86 to 7.2% in 1987-88, which in dollars amounts to $5.28 million.

The statistical data provide an argument for greater equalization in the financial support provided community college districts, which .1 previously discussed in another paper, but the data also argue strongly for a change in the funding formula—a change which would provide a more adequate revenue base in that it would enable the community college districts to fund educational programs equal or close to their Gann Appropriation Limits. Obviously, the issue is complicated, and the important fact of reality is that the districts not only suffer from the effects of an inadequate formula for determining their annual spending limits but from revenue deficiencies which deny them the ability even to fund at a level authorized by an inadequate expenditure limit.

Cities are not being as adversely affected by of a revenue deficiency as are the counties and community colleges since they have a broader local tax base. Furthermore, judicial interpretations of Proposition #13 have allowed cities to increase local tax revenues. Proposition #13 property tax rates, for example, may be increased if the revenues are to finance retirement benefits contracted prior to voter approval of the Jarvis-Gann Limit. The decision was Carman vs. Alvord. In the San Francisco vs. Farrell Decision it was ruled that the two-thirds vote required by Proposition #13 to increase special taxes did not apply if the tax revenues were to finance general fund expenditures, since such taxes would not be classified as “special taxes” as defined under the initiative. As a consequence of this ruling, a number of cities have been able to raise taxes as a means of generating additional revenues. Fewer counties have taken advantage of this court decision because there are more strict statutory limits upon the taxing power of counties than upon city governments.

An interesting fact of California history is that in the early sixties a Governor's Commission on Metropolitan Urban Affairs produced a study relating to local government structure and organization and concluded that there was a need to reduce the number of city incorporations and the creation of special districts and simultaneously to encourage the creation of regional government units. representing the cities and counties in the area for responsible planning. The object of the Commission's recommendations, of course, was to encourage more meaningful planning and development in such areas as transportation, fire and police protection, land conservation, park and recreation development and public education. One outcome was the creation of Local Agency Formation Commissions and because of that action for many years the state has benefitted from a constructive program to provide reasonable and responsible control over the organization and structure of local governments. The effort, however, has not measured up to the goals and objectives of those who were evolved in implementing the concept as an important approach to the issues of conservation and responsible environmental protection.

Unfortunately, because of the negative impact of Proposition #13 on local government revenues, the fiscal benefit of the general sales tax to California cities, and the Supreme Court decision re increases in special taxes, there is an incentive for local communities to seek city incorporation. In the early sixties, for example, Sacramento County had five incorporated areas—North Sacramento, Isleton, Folsom, Sacramento and Galt. Today, after the annexation of North Sacramento by the City of Sacramento, there are only four, and there is the drive to incorporate Elk Grove, Carmichael and Citrus Heights, and in Yolo County, West Sacramento has incorporated. The contemplated incorporation efforts, if successful, will, it appears, deprive Sacramento County of much needed revenues and result in a duplication of government services.

Sacramento County is already suffering from a revenue shortfall because of Proposition #13 and the unrealistic expenditure limit imposed by Proposition #4. Because of these conditions, one can only conclude that community planning will be more difficult and the provision of county services restricted, though the local communities in which incorporation occurs may experience an enhancement of local government services with a potential for tax increases. The future is uncertain. It is clear, however, that community planning and environmental protection have a lower priority today than they had during the sixties and seventies.

In 1986-87 fifty-five cities were within ten percent of their Gann Limits and eighty-one were within 20%. For counties, the statistics were not so favorable. In 1985-86, of the 58 counties, 19 were within 10% of their Gann Limits and 31 were within 20% of their Gann Limits.⁷

It seems apparent that there are at least three changes in California's fiscal situation that are warranted. They are as follows: (1) a formula for calculating annual Gann Limits which more meaningfully conforms to the stated purpose of the designers of the initiative, (2) the exclusion from the Gann Appropriation Limit of budget reserves set aside to protect agencies of Government and the schools from the negative impact of a serious decline in revenues, and (3) some adjustment which would enhance revenues received by agencies of government whose revenue base consistently proves inadequate to finance the Gann Appropriation Limit level of services.

Some thought might be given to a program under which state surpluses above a prudent reserve level might be distributed on a formula basis to agencies of local government and school districts suffering from a serious revenue shortfall—revenues less than the appropriation level authorized by the local Gann Limit.

Another concept worthy of consideration is the enhancement in local government revenues. If such a change were to be achieved, of course, a major modification in the Proposition #13 amendment will have to be implemented. It must be recognized, however, that a substantive and realistic change in the basic provisions of Proposition #13 will be unpopular with important elements in the state and that an unrealistic and very idealistic change will result in local revenue losses and, therefore, only compound the negative character of revenue structure upon which local governments are so dependent. Significant and constructive reform will not be easy.

Historically, California has had a fine reputation for the quality of its public services and the character of its infrastructure. The question today, unfortunately, is: Will that tradition be continued? It cannot be preserved under Proposition #13 and #4 as they were approved by the voters.
¹ A copy of letter of solicitation is on the last page of this paper.

²The Gann Limit estimates do not conform to those made by the Department of Finance because of the fact that the Department added dollar amounts to its Gann Limit calculations which have been questioned by the Office of Legislative Analyst and which I excluded. Because of the dollar augmentations, the Department of Finance has established state Gann Limits at a higher level. The disagreement over the appropriateness of the dollar augmentation has not been resolved as of yet and may ultimately be decided by the judiciary.

³ Elasticity is the percentage increase in revenues compared to the percentage increase in Personal Income. If the increase is the same, elasticity is unity, or 1. If it is greater by 10%, the elasticity is 1.1; if it is lower by 10%, it is .9, or inelastic.

⁴ Legislation was enacted during the closing hour of the session which authorized a modest dollar allocation to urban school districts. The school allocation was $86.6 million. Prior to that action, the Governor vetoed a school apportionment bill which would have granted an additional $700 million to public education, K-14.

⁵ Between 1984-85 and 1985-86 county appropriation limits increased at a more rapid rate than county revenues in twenty counties. The appropriation limit placed a restriction on eleven counties.
⁶ Sacramento City Unified School District had a 10.1% revenue shortfall; all K-12 districts in the county experienced a 4.6% shortfall and the county office shortfall was 21.9%, or $3 million below the Gann Limit of $15.9 million. ADA declines could be a critical factor with respect to some school districts.

⁷ Rough calculations indicate that in 1981-82 the City of Los Angeles raised approximately 43% of its local revenues from the sales tax and local taxes; whereas, in 1982-83 the County of San Diego generated only 11% of its local revenues from the sales tax and other local taxes. Fees and miscellaneous sources provided 33% of local revenues for the City of Los Angeles in 1981-82 and fees generated 28% of local revenues for San Diego County in 1982-83.

The statistical data for these calculations were derived from a California Tax Foundation Study entitled, “California Local Government Finance: Issues for the 80's.” Part I Summary, April 1984. Caution should be exercised in using the data since there is a wide diversity among the cities and counties, as well as between counties and cities.

Benjamin Franklin and 18th Century Economic Thought (1939)

2010-08-15T11:00:00.000-07:00

The Rodda Project: An early essay on American economics

The title page of Sen. Rodda's paper on Benjamin Franklin and his views on economics carries an interesting information block:

COLONIAL MIND
Barker
Winter, 1939
Albert S. Rodda

One assumes, therefore, that Albert wrote this paper back in 1939 in response to an assignment in Professor Barker's winter quarter class on the colonial mind. Was Albert on sabattical from his high school position, taking a seminar at Stanford—or was it elsewhere? He had already earned his bachelor's degree from Stanford in 1933 and would not return for graduate studies until after World War II. This essay, therefore, remains something of a mystery.

However, the Senator was clearly fond enough of the essay to include it in his collection of papers and to make copies of it available. The version I possess was clearly typed professionally by the Senator's office staff rather than by the Senator himself (Albert's own typing is rather distinctive) and my copy is a photocopy of a comb-bound original. Since he often tinkered with and fussed over his papers, it's likely that the following essay is not exactly as it was in 1939. Nevertheless, it gives us a peek at an early stage of the Senator's thoughts on economics and presents his analysis of a Founding Father's perspective on economic theory.

One small technical note: The number 20 occurs twice as a footnote reference, but this is probably a typo. The reference for the first footnote 20 appears to be missing.

—TB

Benjamin Franklin in Relation to the Economic Thought of the Eighteenth Century

Albert S. Rodda

Winter, 1939

Europe in the eighteenth century was in a state of intellectual revolt against tradition and authority. Institutions, religion, philosophy, the sciences, morals, all were under the examining eyes of the rationalistic philosophers who were busy tearing down, patching up, and rebuilding European civilization according to an architectural pattern which would harmonize with the discoveries of inductive science and which would conform with the “eternal” laws of the natural order.

Men like Hume, Bayle, Locke, Voltaire, Diderot, Rousseau, scoffing at everything which was upheld by the sanctity of tradition, directed the vanguard of the attack on the ancien regime. With reason their weapon, humanity their cause, they drove relentlessly against every stronghold of old order.

Colonial America, though situated on the periphery of the struggle, was able, nevertheless, to contribute in no small degree to the spread of the principles of enlightenment. European traditionalism had been established only weakly on this side of the Atlantic, and a careless British government had allowed heretical institutions to take shape, with the result that the colonies served, somewhat unconsciously, as an experimental laboratory where the social theories of the intellectual dissenters were put to test.

Prior to 1700 the colonials were carefully nourishing such innovations as religious toleration, local self-government, social equality, constitutional government, and other significant departures from the social experiences of. the past. A few colonial philosophers had risen to leadership—Roger Williams and William Penn, for example— but none had approached the stature of their European contemporaries. Before the turn of the century American participation in the cause of liberty and freedom had been an important one, but it had been clearly more institutional than personal in character.

In the eighteenth century, however, Benjamin Franklin emerged from the American scene to occupy such an important position in the intellectual world as to force even the Europe of Voltaire to acknowledge him. Without a doubt, Franklin was the dominant intellectual light in the colonies and he was their great contribution to the cause of philosophical rationalism. Though less the destructive critic than most of his contemporaries, he was a true representative of that group of learned men. Truth, justice, peace, and order on earth were the goals sought by the apostles of enlightenment, and this was true of none more than it was true of Franklin. The impelling ambition of Franklin's philosophy was the betterment of the spirit of man and of the spirit of the world.

Not a creator of abstruse philosophical systems, Franklin gave the world no treatises on science, no monographs on government, no essays on philosophy and religion. For these things he was not famous. His greatness lay rather in the versatility of his knowledge, in his understanding of men, in the sobriety and depth of his character, in the breadth of his tolerance, and in his vast knowledge of the world and of the people in it. In these things Franklin showed a maturity of wisdom, perhaps, unequalled by anyone in his time.

Notwithstanding the fact that Franklin never wrote a treatise on economic theory, he must be credited with being the first American economist.¹. His writings are full of intelligent opinions on the economic problems of his century, such as paper currency, free trade, taxation, population, slavery, interest and capital, labor, and many others. It is impossible, however, to say that he belonged to a particular school of economic thought, though he subscribed to the fundamental tenets of the Physiocrats.

Born in 1706, Franklin grew to manhood at a time when mercantilism, the theory of political economy which flourished in the seventeenth century, was on the defensive. The history of mercantilism had been closely interwoven with the social fabric of the ancien régime, and for this reason it was under suspicion and its doctrines were being rudely examined by the philosophers. Particularly in France, where commerce and industry had long experienced the suffocating restrictions of “Colbertian” mercantilism, was this true. In that country economic theory was being directed into new channels by a group of rationalists—the Physiocrats.

These men were the predecessors of Adam Smith in the attack on mercantilism. Their ideas were antithetical to the mercantile system, which they opposed because it violated the natural order of things,² and it was from their doctrines that Smith developed the laissez-faire principles, so ably presented in his book The Wealth of Nations, which led to the complete discrediting of mercantilism.³ Between the extreme of laissez-faire and mercantilism must be placed the Physiocrats and Benjamin Franklin; they bridged the gap which separated the two.

Franklin came into first contact with the Physiocratic school of thought during his visit to Paris in 1767. At that time he met and became a personal friend of Quesnay, Mirabeau, Du Pont de Nemours, Turgot, and others.⁴ The exchange of ideas which took place naturally had a strong influence on Franklin's opinions, and his economic writings after that time reveal his inclination towards the Physiocratic way of thinking. However, it must be admitted that Franklin's own personal ideas and views, which he had developed independently of the Physiocrats, had made him a person who was almost a Physiocrat before he became familiar with their tenets.

Resenting British interference in colonial trade and industry, Franklin had become a believer in free trade as early as 1747.⁵ The Physiocratic objections to the mercantile restrictions on French commerce and their insistence on world-wide free trade served to convince Franklin of the correctness of his own views and caused him to become more firm in his opposition to British mercantilism.

At the same time, the relatively significant position occupied by agriculture in the colonial economic system had long absorbed Franklin's attention, and had made him a sincere and understanding friend of the farmer. He soon became quite won over to the idea of the Physiocrats that the only creators of real value were the agriculturists and those engaged in the extractive industries.⁶

He, therefore, subscribed to the theory of the “produit net” and supported the Physiocrats in their demand for the single tax on land, or the “impôt unique.”⁷ Franklin was considerably more sensible to the limitations of this principle than were the Physiocrats, however, and he suggested that in practice there doubtless would be countries in which the exclusive use of the “impôt unique” as a source of revenue would prove impossible. For this reason, he consented to a restricted use of indirect taxes on trade and industry where conditions adverse to the single tax prevailed. It was on the basis of this opinion that he later considered his conduct in support of a low import duty in Pennsylvania completely in accord with his original views. The American colonies, in his belief, presented an environment unfavorable to a successful application of the single tax principle.⁸

In respect of the question of value Franklin had again adopted the Physiocratic concept. In his early years he had adhered to the “labor-time” theory of value which he had learned from Sir William Petty, but he soon abandoned it for the value theory as conceived by the Physiocrats.⁹

He wrote to Lord Kames, in February, 1769:

Food is always necessary to all; and much the greatest part of the labour of mankind is employed in raising provisions for the mouth. Is not this kind of labour, then, the fittest to be the standard by which to measure the values of all other labour, and consequently of all other things whose value. depends on the labour of making or procuring them?¹⁰

This definition of value was a correlative to the theory of the “produit net.” For it was by the use of this value concept that the Physiocrats demonstrated the sterility of manufacturing. To labor engaged in manufacturing was attributed, by Physiocratic theory, a wage equivalent to the needs of living at a bare subsistence level. According to this proposition it was clear to the Physiocrats that during the process of manufacture labor would consume the entire reward for its efforts so that its work would not be productive of any addition to the sum total of social wealth. It must not be supposed, however, that either the Physiocrats or Franklin were of the opinion that manufacturing did not serve a social purpose. They merely maintained that manufacture produced no new wealth and that its service to society was in changing wealth to more desirable forms.¹¹

Franklin also agreed with the Physiocrats in their opinion that commerce was merely an exchange of equal values and, therefore, was unproductive and was of benefit to society only insofar as it created place utility. According to this belief the only way a nation could secure wealth by foreign trade was through unfair commerce, or the exchange of commodities for foreign goods of greater intrinsic value—determined, of course, according to the Physiocratic value theory.¹²

Doubtless, Franklin favored the principles of the Physiocrats because of the emphatic support they gave to the movement for free trade and because of the significance they attributed to agriculture in the economic scheme of things. It is my opinion that the close similarity between the views of Franklin and the Physiocrats can be explained further as a natural outcome of the fact that they experienced the same feeling of humanitarian idealism. The philosophical outlook of the Physiocrats was predicated upon a spirit of altruism and upon an unselfish devotion to the task of improving society. They were seeking to design a social order in harmony with the “natural” scheme of things which they were certain would be more fitting to man's needs. In so doing, they struck a particularly responsive chord in Franklin, for they appealed to his strong sense of justice and to his implicit faith in a divine creator.

In their rebellion against the “positive” order created by the arbitrary enactments of governments, the Physiocrats, as we have observed, carried on their attack by extolling free competition among men and free trade among nations. However, their support of competition and of free trade was a subordinate part of their doctrine. They laid greater stress upon the importance of agriculture and the “produit net” concept, and in so doing they took up a blind trail and marched off into oblivion.

Quite the contrary, Adam Smith gave greater emphasis to the idea of free economic activity and elaborated a theory of political economy which rested upon a more comprehensive concept of the social order than that of the Physiocrats. Accepting the Lockean assumption of the natural order, so important to the Physiocratic analysis, Smith explained an economic system which operated naturally and spontaneously as a result of the competitive action of individuals working for their self-interest within the framework of a system of free economy.¹³

Predicating his investigations, then, upon the hypothesis that the social order operates according to fundamental natural laws, that free economic competition is necessary if society is to benefit from the spontaneous operation of these laws, and that individuals are governed in their action by the consideration of their own self-interest, Smith brought forth in The Wealth of Nations what he considered to be a detailed analysis of the dynamics of man's economic activities. His conclusions concerning the nature of wages, rent, value, money, taxation, production, distribution and other economic phenomena constitute the world's first scientific treatise on economic history and principles. In so doing, he unconsciously gave direction to the course that economic reasoning was to pursue during the nineteenth century, and although many of his ideas have been proven erroneous and have been abandoned, the essence of modern laissez- faire reasoning has its genesis in Adam Smith's basic assumptions and conclusions.

Concerning Franklin's attitude on the ideas put forth in the Wealth of Nations, we have little positive information. That Franklin knew of Smith's work is certain. In fact, Franklin was personally acquainted with Smith and was in touch with him in London (1773-1775) , while he was finishing his book. A Mrs. Deborah Logan stated in the memoirs which she wrote of her husband's life that Franklin told her husband that Smith had accepted certain suggestions of criticism made by Franklin with respect to particular chapters in the Wealth of Nations.¹⁴ It seems, though, that Mrs. Logan's statement exaggerated the influence that Franklin may have exerted on Smith while he was in London.¹⁵ Undoubtedly, Smith was familiar with Franklin's writing and thinking concerning certain politico-economic problems which had reference to the colonies, and Lewis Carey in his work entitled Franklin's Economic Views expresses the opinion that Smith embodied in his work some of Franklin's ideas with respect to the effect of abundant land on wages and population in a frontier society, certain population tendencies in the colonies, and the colonial point of view in regard to the British imperial system.¹⁶

Whenever Adam Smith's reasoning was in line with that of the Physiocrats, Franklin found it easy to agree with him. For example, in the case of free trade there existed a close similarity between the two men's opinion; although neither of them was in complete accord with the French economists. Both Franklin and Smith agreed that free trade was the most desirable situation with respect to the carrying on of commerce between nations, and yet both admitted that there were occasions when mild revenue tariffs and other restrictions, if not excessive or extreme, were justifiable. The Physiocrats, of course, could not agree with this mild departure from their doctrine.

Franklin would have approved of the implication of the “natural” order in Smith's system. He would also have favored Smith's forceful demonstration of the validity of the doctrine of free competition. The principles of extreme individualism, however, which exerted such a forceful influence on nineteenth century laissez-faire reasoning were not Smith's. Smith was suspicious of the social effects of unrestrained individualism and favored government regulation of the freedom of the individual when the better interests of society could be served by so doing.¹⁹ Franklin would have certainly agreed to this. Although a believer in free trade and the principle of “Pas trop gouverner,” he was aware of the weaknesses of human nature and would have questioned the wisdom of granting compete license to the individual. On minor points of doctrine Smith and Franklin found occasion to disagree quite widely. In their conceptions of a theory of value, for example, there was a wide divergence in the thinking of the two. Franklin, as we observed, expressed a belief similar to the Physiocratic idea; this was rejected by Smith, who, though somewhat uncertain about the real nature of value, suggested that it was determined by the amount of labor or of a combination of labor, land and capital which had gone into the productive process.^20[?]

Again in the case of money Franklin subscribed to a different principle. Throughout his life he was consistent in supporting inflation in the colonies through the emission of paper currency. Though at all times moderate in his demands, he was, nevertheless, on the opposite of this issue from Adam Smith, who regarded the printing of paper money with a suspicious eye and a procedure to be utilized with discretion.²⁰

Smith refused to accept the Physiocratic principle of the “produit net,” while Franklin gave every indication in his writing to a belief in this concept, and made the mistake, along with the Physiocrats, of exaggerating the importance of agriculture to the economic system. Smith, in fact, was the first important economist to assert that commerce and manufacturing were productive of economic wealth, and to emphasize the importance of the division of labor and the accumulation of capital in effecting increases in social income.²¹

As a philosopher, Benjamin Franklin belonged to the eighteenth century. He was a rationalist and believed that the human mind could solve most of the problems of living. He was a deist and sympathized with the idea of a “natural” law which governed human society. He was an optimist arid was convinced that society could be bettered. He was an individualist, but advocated some restraint of the individual on behalf of the interests of society. As an economist, he also belonged to the eighteenth century. His reasoning paralleled closely that of the Physiocrats, though he was less dogmatic in insisting on the infallibility of the Physiocratic tenets. And in striving for a solution to a practical economic problem of the day, he was quite willing to use whatever theoretical approach seemed the most reasonable. For this reason he accepted several of Adam Smith's most fundamental arguments. However, he could never have become a whole-hearted believer in the nineteenth century philosophy of laissez-faire. He was too much the sociologist and too little the scientific economist.

¹ V.L. Parrington, The Colonial Mind (New York, 1927), p. 170.

² Lewis J. Carey, Franklin's Economic Views (New York, 1928), p. 140.

³ Ibid., p. 160.

⁴ Ibid., pp. 137-9, B.A. Wetzel, Benjamin Franklin as an Economist (Baltimore, 1895), p. 31.

⁵ Carey, op. cit., pp. 134, 161-2; Albert H. Smyth, ed., The Writings of Benjamin Franklin (New York, 1907), II, 313-4, IV, 469.

⁶ Frank L. Mott and C.E. Jorgenson, eds., Benjamin Franklin (New York, 1936) , 345-7.

⁷ Carey, op. cit., pp. 154-5.

⁸ Franklin to Small, September 28, 1787. Smyth, op. cit., IX, 614-5.

⁹ Carey, op. cit., p. 147; Arthur E. Monroe, ed., Early Economic Thought, Selections from Economic Literature Prior to Adam Smith (Cambridge, 1930), 211-2.

¹⁰ Franklin to Kames, February, 1769. Smyth, op. cit., V, 102; Carey, op. cit., pp. 142-3.

¹¹ Franklin to Evans, February 20, 1768. Smyth, op. cit., V, 102: Carey, op. cit., pp. 142-3.

¹² Franklin's “Position to the Examined, Concerning National Wealth,” April 4, 1769. Mott, op. cit., pp. 345-7.

¹³ Encyclopaedia of the Social Sciences, IX, 15; Glen R. Morrow, The Ethical and Economic Thinking of Adam Smith, (New York, 1923), pp. 79-80.

¹⁴ Carey, op. cit., pp. 106-7.

¹⁵ Ibid., p. 130.

¹⁶ Ibid., pp. 124, 131.

¹⁷ Franklin to Small, September 28, 1787. Smyth, op. cit., IX, 614-5; Charles Gide and Charles Rist, Histoire des Doctrines Economiques Jusque Nous Jours (Paris, 1909), p. 117.

¹⁸ Ibid., p. 110.

¹⁹ Wetzel, op. cit., pp. 52-3.

²⁰ Adam Smith, Wealth of Nations (New York, 1937) Edwin Cannan, ed., pp. 47, 48, 51; Gide, op. cit., p. 87.

²¹ Morrow, op. cit., p. 165.

BIBLIOGRAPHY

I. SOURCE MATERIALS

Franklin, Benjamin. Autobiography. Goodman, Nathan, ed. New York, 1932.

Smyth, A.H., ed. The Writings of Benjamin Franklin, 10 vols. New York, 1907.

Smith, Adam. An Inquiry into the Nature and Cause of the Wealth of Nations. Cannan, Edwin., ed. New York, 1937.

II. SECONDARY MATERIALS

Carey, Lewis J. Franklin's Economic Views. New York, 1928.

Gide, Charles and Rist, Charles. Histoire des Doctrines Economiques Jusque Nous Jours. Paris, 1909.

Morrow, G.R. The Ethical and Economic Thinking of Adam Smith. New York, 1923.

Mott, F.L. and Jorgenson, C.E. Benjamin Franklin. New York, 1936.

Parrington, V.L. The Colonial Mind. New York, 1927.

Wetzel, B.A. Benjamin Franklin as an Economist. Baltimore, 1895.

The post-election family letter

2010-08-04T18:00:00.000-07:00

Coming to terms with the 1980 election

Shortly after his defeat for re-election in the 1980 general election, Albert Rodda took some time to write a letter that he distributed to his family members and his closest friends. More than two decades in the state senate had taken their toll on Albert and the silver lining in the 1980 election was the unsought opportunity to step back from the thick of things. As Phil Isenberg commented at the Senator's memorial ceremony in April 2010, Albert even suspected that his health was the better for his defeat. The additional time he had to spend with his wife Clarice was a sweetener in the face of disappointment.

The Senator kept the family letter in his files and occasionally sent it out in response to queries from political supporters. My copy comes from a packet of his writings that he shared with the members of the Friday lunch group. It includes the following preamble, a personal letter to Marge Burgess of Davis:

December 1981

Dear Marge:

Enclosed is an analysis of the election. Note the involvement of the Mormons and the radical right.

Incidentally, the indictment of Al Robbins occurred on Friday, the week-end of the election. The Gun Owners' campaign money was contributed after October 20, the last day for filing campaign contributions before the election. Senator Bill Richardson had told the County District Attorney that the Republicans had a “gimmick” against Rodda. The D.A. was elected because of the financial support of one of the Kelley brothers—a conservative who is an owner of Channel #3—traditional enemies of mine. Incidentally, many of our campaign signs were torn down, one had.a centerfold from Play Boy posted on it. Gross misrepresentations were made with respect to my voting record and my legislative activities. Telephone polls were used to confuse the voters about Robbins and to imply that I had the support of the Hayden Fonda group.

I am mailing this because I know of your interest in politics and your involvement in the local Democratic Party with Clary and me over the years. It was lovely to chat with you at the Wood's party. It is always a delight to meet our friends at the Wood's home. Clary sends her best wishes.

Sincerely,
Albert S. Rodda
Executive Secretary
Enclosure

“Clary,” of course, is a reference to Albert's wife Clarice. At the time of his letter to Ms. Burgess, the Senator was serving as executive secretary of the Commission on State Finance. The lunch group packet did not include the newspaper clippings, but it did include the four-page “family letter.”

—TB

FAMILY LETTER—ELECTION 1980

As you know, I have been defeated for re-election. Philosophically, I have accepted the defeat and I am looking forward to other activities. Clarice is also quite philosophical about the outcome. We will work to achieve a good life in retirement.

The reason that I am writing is to indicate to you the factors responsible for the defeat. As an incumbent, I have been a traditional liberal who reflected in his thinking the philosophy of Adlai Stevenson and progressive Republicans, such as Tom Kuchel. Today, the trend is away from that political perspective and the word liberal has become, in effect, unacceptable to many people. I knew that and I could have enhanced my chance for re-election if I had somewhat modified my image by denying my liberal convictions. But I would have presented myself improperly to the public. I decided not to do that. I preferred to accept the risks which were involved in continued adherence to my basic philosophy, responsible, not radical, liberalism.

I knew that I was in trouble when John Doolittle won the nomination in the Primary because it was well known that he was sponsored by Senator H.L. “Bill” Richardson, a very reactionary State Senator who collects substantial amounts of money from gun owners for the purpose of financing political campaigns against liberal Democrats. Richardson also has ties with the Moral Majority and has their support in his political activities. He is very negative with respect to government. In fact, Richardson, a former John Bircher, voted “no” on practically all substantive issues recently under consideration—the “bail-out” of local government, the State Budget, legislation to achieve tax relief-reform and environmental protection and to provide special education for handicapped children. It is clear that my opponent reflects in his thinking the basic political. philosophy of Senator Richardson, although the public is not aware of that fact because Mr. Doolittle did not indicate to the voters during the campaign what his philosophy was, nor did he discuss the significant issues that are known to confront the state.

John Doolittle is a Mormon and had the backing of the Mormons in the Sacramento community; in fact, they did much of his campaign work for him.

The fact that Mr. Doolittle received money from the gun owners' organizations enabled him to hire professional people to plan and direct his campaign. The campaign strategy the experts designed was to establish the fact, through a campaign brochure, that he was a decent, respectable, young conservative whose back ground was religious and moral. Once that was done, the strategy was to attack me during the last days of the campaign, when there was little time for me to respond. Radio and television time was used, to that end, as were campaign mailers. The mailers, incidentally, were very scientifically designed and sent out to a computer-selected list of voters. The material misrepresented my position on two basic issues—crime and education. The voters were told that I was soft on crime and responsible, therefore, for the increase in crime which occurred in the last 20 years in Sacramento County. They also were told that I advocated permissiveness in the schools and that I was responsible, therefore, for the decline in the educational achievement of students in California. In both instances, the statements made were unfair and inaccurate. With reference to the soft on crime issues, my opponent cited a number of votes and actions by me to sustain his argument; unfortunately, he omitted important information and clearly misstated some of the facts. We responded to the charges through a newspaper ad, which is enclosed, and it was printed in the Sacramento Bee and the Sacramento Union on Sunday, November 2nd; unfortunately, as I feared, not too many people read the ad; had they done so, they would have realized that my record was being grossly misrepresented. I also tried in the ad to answer another charge, which was that I had authorized teachers to strike. The collective bargaining law, which I authored, was well understood to deny the right of concerted action, or the strike, to employees of the public schools and in that respect was the same as the previous law, the Winton-Russell Act.

The campaign not only misrepresented my record and created a false image of my role in the Legislature, but, as I stated above, it failed to state the position of my opponent on significant issues. Mr. Doolittle would have had to admit, had he done so, that since he supported Proposition #9, which would have deprived the state of $3 billion of revenue this year, that he favored drastic reductions in the quality of state service and in the ability of the state to finance local government, including schools. This issue and others, which are very significant and which I have been trying to address, as chairman of the Senate Finance Committee, he totally ignored. What I am saying is that no meaningful attention was given in the campaign to the basic issues confronting California. The opposition campaign was drafted very cleverly to place me in a very negative context and to capitalize on the conservative political trend, the people's fears and feelings of insecurity, their almost hostile feeling toward government and their dissatisfaction with the public schools.

Nevertheless, I think that I could have won the election had it not been for two circumstances that affected the election. One was the release by the media of data which indicated that, even before the President conceded his defeat, Carter could not win re-election. As you and I know, many people, after that information was made public, failed to vote and many of them were Democrats. But the second critical factor was the action of the District Attorney of Sacramento County in announcing just a few days before the election that State Senator Alan Robbins had been indicted by the Grand Jury for sexual relations with women who were under the age of 18. A great deal of publicity was given the indictment by the media and it appears that many constituents confused me with Senator Al Robbins. We have reason to think that this confusion happened throughout the district. Reverend Korfhage, a retired Methodist Minister, for example, communicated with several neighbors to indicate his support of me and two immediately commented that “Senator Rodda has been indicted.” Several other friends indicated the same experience—that voters were unable to distinguish between Robbins and Rodda. Incidentally, we have been told that my opponent's poll of voters in the district supported this fact—that there was confusion. That confusion among the voters alone could have significantly influenced the election.

I am enclosing the mailer that we sent to the voters to indicate my philosophy and position on issues. It was positive. As stated above, I am sending also a copy of the newspaper ad which we used in response to the charges that were made with respect to my failure to support meaningful laws to curb criminal activity. I am sending this material to you because I want you to know the facts about my record.

I have tried to be an objective and conscientious Senator. I have not taken honoraria when I made speeches and there were many speeches for which I could have received compensation. I have not maintained a district office and I had the opportunity to do so in two areas of Sacramento. That would have added to the cost of my office. I. did not use a district newsletter and I saved the state, therefore, about $30,000 annually for about 12 years. Unfortunately, as a consequence, I did not establish a strong name identification. Furthermore, I was so much involved in the burdensome responsibilities of my position as chairman of the Senate Finance Committee that I was not able to become as actively involved in minor local community affairs as I otherwise could have been. I had to make the choice—being responsible, being diligent and performing my burdensome tasks, or being political and making my re-election a first priority. I chose the former. Furthermore, I would not change my style of campaigning and shift from a constructive effort to inform the voters of my philosophy and my actions with respect to the state and this community to one in which I would engage in the campaign style and tactics used by my opponent. I am disappointed that the voters did not perceive the difference between us and that they refused to acknowledge the constructive contribution that I made over the years to the state, to education, and to this community. One has to accept such a response to one's work, however, when one is a “public servant.”

It is not easy to serve as an elected official. One is constantly under pressure and one is deprived almost of the opportunity of being a free person. Now that I am retiring because of my defeat, Clarice and I hope that we will be able to relax and enjoy the years left to us and to have a closer association with our friends and our relatives. So my defeat hopefully will prove to be a blessing. We are grateful that there are many favorable
aspects to this decision on the part of the voters. I do not want members of the family to feel ashamed or to feel bitter about my retirement from public life because of the fact that it was not voluntary. I appreciate very much the support all of you have given me over the years. It has been a great asset to Clarice and to me and we are very proud of you and the contribution that you have made to this community as members of our family.

I am enclosing copies of newspaper articles that may be of interest. One is an editorial and the other is a Los Angeles Times article. Incidentally, newspapers from allover the state wrote favorable comments about my incumbency. We should be grateful that I served so long and received such friendly and positive commendations.

The Rodda Memorial: Remarks by Tony Barcellos

2010-05-11T16:30:00.000-07:00

As the junior member of Sen. Rodda's staff at the end of his tenure in the state senate, I had less experience than any of his other aides. However, I was given the opportunity to continue that service in other capacities and to regard him as a mentor and friend. The Rodda family generously asked me to contribute some remarks to Albert's memorial ceremony, which I was pleased and honored to do. What follows is a reconstruction of the sense of my remarks, which were not written down in advance.

The Albert S. Rodda Memorial Ceremony
Comments by Tony Barcellos

Friday, April 23, 2010
Sacramento City College Auditorium

When you have so many of Albert Rodda’s family members, friends, colleagues, students, and admirers in one place, there is no story, joke, or anecdote about the Senator that will be new to everyone. Despite that, I will not hesitate to tell you stories you have heard before.

Albert has taught me well.

I was privileged to work as a legislative assistant for the Senator and I am honored that the family asked me to participate in this memorial ceremony. However, being on the program after Greg Geeting, I knew that he would address some of Albert’s best-known stories and that I would have to be prepared to address others. As Greg observed, Albert was content to let others take credit as long as things got done, which is why so much legislation bears the names of his colleagues although much of the language came from the Senator. Greg also pointed out that Albert was an uncharacteristic legislator, a mild-mannered man who was easy to underestimate.

I point out that Albert was, in this way, a deceptive politician. Those who discounted him because of his meek nature soon discovered their mistake. He was a master of his craft.

In times of loss and transition, our culture has developed a ritual to comfort those who are left behind. We praise the departed and pay tribute to his accomplishments. We honor his character and his honesty. We catalog his kindnesses. We say that he will be missed. These are the things we do.

In Al Rodda’s case, however, all these things are true. He makes it possible for us to say these things in all honesty. That is a rare privilege.

Being a part of Senator Rodda’s team will always be one of the most important things in my life. It was during his final term in the state senate that I joined his legislative staff. The boss would sometimes forget that I was such a new arrival and would ask me if I remembered some issue or another from an earlier legislative session. When I pointed out that I had been on staff for only the last two years of his tenure, the Senator would say, “That’s strange. It seemed much longer.”

However, I had the honor of working for Albert in a number of different capacities. When Jess Unruh persuaded the Senator to join the treasurer’s office to run the Commission on State Finance, I was the only person from the Senator’s capitol staff who was asked to accompany him.

All the others had job offers.

Later, when the boss decided to run for the Los Rios board of trustees, I worked on his campaign. I know that some people—perhaps people in this room—approached Albert and asked him to head a search committee to recruit a candidate for Los Rios Trustee Area 5. “Look, Al,” they told him. “You live in Area 5 and you would be the perfect person to persuade a good candidate to run for the board from that area.” Of course, everyone approached by the Senator responded by saying, “Al, why don’t you run?” I’m sure the people who slyly maneuvered Albert into this position must have been quite proud of themselves, but did they really think they had him fooled?

I imagine he could have said, “Thank you, my friends, for talking me into doing something I was already thinking of doing.”

After the Senator’s smashing victory, I naturally asked him about the possible of a little political patronage for his campaign staff. “When do I get a faculty appointment?” I inquired. Albert was completely deadpan when he replied. “I’m sorry, Tony,” he said, “but we’re going to continue to hire people based on merit.”

It was another four years before I managed to land a position at American River College. The final stage of the hiring process was a one-on-one interview with the college president, Queen Randall. Of course, Albert’s name was included on my application as one of my references. I was happy to have his support, but it would have been impolitic and awkward to make too much of it. I was wondering the Senator’s name would come up and how I would handle it if it did.

I didn’t have long to wonder. No sooner had I been ushered into her office than Dr. Randall came sweeping around from behind her desk to shake my hand and exclaim, “Oh! I see you got to work for Dr. Rodda! Isn’t he the most wonderful man?”

“Yes,” I said. “Yes, he is!”

Yes. He was.

The Rodda Memorial: Eulogy by Greg Geeting

2010-05-07T05:30:00.000-07:00

Greg Geeting first worked for Sen. Rodda as an intern. He later returned to the Senator's staff as a legislative assistant and later as a consultant to the Senate Finance Committee. After service with the State Board of Education (executive director) and the State Department of Education (administrator), Greg was elected to the Sacramento County Board of Education. The Rodda family invited Greg to speak at the Senator's memorial service on April 23, 2010, at which he delivered this eulogy.

Memorial Program for Albert S. Rodda, Jr.
Comments by Greg Geeting
Friday, April 23, 2010
Sacramento City College Auditorium

Of all the people I have known, none has been more remarkable than Albert S. Rodda, Jr. For that reason, I’ve encountered two distinct challenges in preparing comments about his life. The first has been deciding what to leave out when considering a life so rich, so full, so deep in courage and contribution. The second has been deciding just where to begin.

I’ve settled on beginning at the end. Margaret Rodda alerted me to the potential that Albert might pass away on Saturday evening, April 3. I made my way over to the house and had the great honor—and I do consider it that—of putting my hands on his shoulders and saying one last time, “You, sir, are a great man. We are all privileged to know you and to be your friend.”

As I prepared to leave—all of us choking back tears—I complimented Albert’s long-time caregivers—Ana and Eli—on the graceful dignity that they had enabled him to maintain over the past five years. King of his recliner, he usually greeted visitors with a smile and a laugh, and he was always so well cared for. I said I would return the following day, Easter Sunday, but we acknowledged in some unspoken way that the end appeared near.

On Easter morning, my daughter and I spotted Eli while walking around Curtis Park, and he informed me that Albert had passed away. Eli had gotten that sixth sense that Albert’s passing was imminent, and he called Ana to return quickly from the pharmacy. Then he said, “Albert, you must wait until she gets back.” And somehow he summoned the strength to do so, holding on until Ana returned, then quietly passed away.

We forged on around the park, and as we came up the eastern side—honest to Pete—if there weren’t two young boys playing ball—about 10 years old, one a bit older, one a bit younger—just as Albert and Richard might have done some nine decades before. It was spring in Curtis Park, and the cycle of life was renewed.

Now, I believe I first met Albert Rodda in 1964. I was 11, and my father and I were traveling around to the local democratic clubs with a black-and-white, 16 millimeter promotional film for the Lyndon Johnson-Hubert Humphrey ticket. My dad absolutely loathed dealing with the film projector. I’m pretty sure I met Senator Rodda at one of the local clubs. My dad said they had been colleagues back when Sacramento State College was co-located here on the Junior College campus. I also remember him saying, “Senator Rodda is a quiet man, but he really gets things done!” Now, I like to think that he added, “I hope you’ll be just like him.” However, that may be wishful recollecting.

In any case, fast forward 10 years to 1974—I joined Senator Rodda’s office as an intern. From the first minute, it simply felt like the right place to be. I didn’t want to leave, and—as fate sometimes makes possible—I remained for seven years in different capacities. I truly believe that all of us who worked for Senator Rodda during some part of those splendid years knew that we were participating in a rare golden age. It was a privilege of destiny; a providential turn of events in our own lives. During my own seven years, and in the 30 years of friendship that followed, I came to learn much about this outstanding and truly gentle-man.

Now, as my time is limited, I have chosen to focus on three of the many fine qualities that made Albert so remarkable.

First and foremost was his noteworthy academic accomplishment, as his many papers attest. The memorial program notes his degrees from Stanford University and his graduation Phi Beta Kappa. And, that was during the hardscrabble existence of the Great Depression, while he worked for pennies an hour in a box factory. Importantly, though, he did not put his intellectual pursuits on the shelf—so to speak—but kept current. He always had a book in hand, such as Barrett’s Irrational Man, exploring the intricacies of Jose Ortega y Gasset among other existentialists—and the books were always stuffed with newspaper clippings and handwritten notes.

In 1971, he delivered his paper “Freedom: With God or Without God?” contrasting the views of Nietzsche, Sartre, and Kierkegaard. He did so not to give a tidy pirouette of academic prowess, but rather to pose deeply introspective, challenging questions for his audience to ponder.

Albert often frustrated a press increasingly hungry for short, quotable quotes. His obituary in the Sacramento Bee mentions one. He was asked to state simply his personal religious views. He responded, “I used to call myself an agnostic humanist existentialist, but now I call myself a theist humanist existentialist.” Academically precise, but probably not destined for Rick’s List on CNN!

Second, Albert Rodda was a most atypical politician. He was generally quiet and restrained—rarely given to bombast. Moreover, even back then, politicians did not apologize—it’s a sign of weakness. But, Albert would typically get in three “I’m sorrys” during your first minute of conversation. Clarice used to gently chide him by saying, “Oh, it’s Albert S-for-Sorry Rodda,” which was one of the rare humorous references I recall about him. Another I recall was that he was “the mouse who ate the cat.” Both are very genteel humor to be sure. So, I called my good friend John Mockler to ask for a humorous anecdote about Albert, and he provided me instead with this insight: even though Albert was a very good-humored person, he was not someone people found “funny,” meaning an object of humor. Rather, he was someone people recognized as civil and gentlemanly, and you don’t make fun of them.

As I pondered John’s remarks, I realized that while Albert was “comfortable” with the burdens he carried as a legislator and a politician, it was a studied, tenuous, cautious comfort. His fondness for the Arden Fair Food Circus provides an example. With a number of small food vendors surrounding a vast sea of tables and chairs, each person—including lobbyists who chose to tag along—bought his or her own lunch, and Albert treated all to a dish of ice cream. He once told me that he enjoyed the anonymity of the place. So, there’s a scene for you: chair of the State Senate’s most powerful committee, freed and refreshed by linoleum flooring, Formica tabletops, and plastic trays!

Finally, Albert Rodda was remarkable for his record of accomplishment. Not silly bill counts, though he carried many bills to successful completion, including SB 160, his landmark bill on teacher collective bargaining. Consistently, though, content and substance were Albert’s objectives. He was willing to let someone else author a bill, provided the content and substance were agreeable. Not infrequently, he would carry his own bill for purposes of developing a Senate consensus on a critical issue, then graciously allow a fellow Senator or an Assembly Member to amend the consensus language into another bill and take credit.

He was also willing to fight even the most powerful interests when content and substance so demanded. In 1972, for example, Senator Rodda was one of the very few who opposed SB 90, which simultaneously endeavored to tackle school finance reform and property tax relief, doing neither very well. In an exceedingly rare public display of anger and frustration, he said that schools would be better off eating out of a garbage can than accepting the bill. Everyone from CTA to Wilson Riles to Ronald Reagan patted Albert on the head and thanked him for his passion. Subsequently, when SB 90 proved woefully inadequate, who was it? it was Albert who carried stop-gap measures and then helped shape a longer term solution—as was his custom, content and substance, not “I told you so.”

So, now it’s my turn to say I’m sorry. I’m sorry for all of the great stuff I had to leave out of these remarks to pare down to these three essentials: pursuing intellectual/academic excellence, being an atypical politician, and—in my father’s words—getting things done!

I close with a paraphrase from the great American poet Edwin Markham’s homage Abraham Lincoln: the Man of the People. In that poem, Markham employs the metaphor of Lincoln as a lordly cedar green with boughs that goes down with a great shout upon the hills and leaves a lonesome place against the sky. Unlike Lincoln, Albert lived a long and full life, and died quietly as had been his way of living. Yet, we all regarded Albert as a lordly cedar, and his passing—just as Lincoln’s—leaves no less of a lonesome place against the sky.

Fiscal implications of Jarvis II, part 2

2008-10-04T11:15:00.000-07:00

The Rodda Project: The battle against Proposition 9 (1980)

The background to Senator Rodda's paper

The attempt to follow up the success of Proposition 13 ran into a snag with Proposition 9. Ballot initiatives in California are not required to meet any particular standards of clarity or specificity. The drafters of Proposition 9 neglected to contain any language relating to its effective date. Some suggested that its adoption by the voters in the June 1980 primary election would cut personal income taxes in half for the entire calendar year, retroactively effective back to January. With the state budget due to take effect on July 1, the state could conceivably find its revenue base cut out from under it with only weeks to drastically overhaul that state spending plan.

The Legislature contained a number of so-called “Proposition 13 babies,” freshman assemblymen and senators elected in the wake of the passage of Proposition 13 in 1978. Several of them were eager to ride the tax-cutting bandwagon further. Other conservative legislators, some of whom had opposed Proposition 13 as too extreme, sought to outflank their junior colleagues and atone for their tardiness in embracing the tax-revolt movement. They seized on the ambiguities in Proposition 9 as opportunities to soft-pedal the impact of the initiative and make it appear less draconian. Legislative measures were introduced to stipulate the effective date of the proposition, if enacted by the voters, and to specify the initiative's impact on personal income tax brackets. These bills would have the effect of mitigating the initial impact of Proposition 9, postponing its biggest shockwave till the next year.

Senator Rodda's initial analysis of Proposition 9, Fiscal Implications of Jarvis II, was published on January 15, 1980. It was snatched up as a vital resource by the opponents of Proposition 9. However, Rodda's paper was criticized by the initiative's proponents because it did not address the mitigating legislation being sponsored by Proposition 9 supporters. Rodda recognized this as a legitimate point and hastened to address it. Only three months after his first analysis, the Senator released a 34-page supplement. That supplement provides the content of this article.

—TB

Supplement to January 15 Paper on Fiscal Implications of Jarvis II or Proposition #9 as Viewed from the Perspective of a Practical Politician

Part I: Possible Responses to Proposition #9: Three Scenarios

Part II: Impact of Campbell Legislation to Repeal Retroactive Implementation

Part III: Impact of Imbrecht Legislation to Apply 1978 Tax Brackets to Indexing of Personal Income Tax and to Repeal Retroactive Implementation of Proposition #9

Calculations and Interpretation by Senator Albert S. Rodda

Comment

The material in this Supplementary Paper is designed to clarify the issues which relate to Proposition #9 and to indicate the impact upon state financing of changes in current law and different estimates of the magnitude of the state's revenues and one-time surplus. Three Scenarios are discussed and projections for Fiscal Years 1980-81 and 1981-82 are made. Totally accurate projections, of course, are impossible; however, if the assumptions are realistic, such forecasts have the ability to indicate the general direction in which trends are developing. That is what these calculations are designed to accomplish: to provide the reader with more than a vague apprehension of the fiscal future for the State of California if it must function after its major source of General Fund Revenues, the Personal Income Tax, is significantly reduced in 1980-81 and succeeding years by Proposition #9. The Personal Income Tax now provides about 35% of the state's General Fund Revenues; Proposition #9 will reduce the future level of support from that source, since the state will receive only 47% of the amount it now receives from the Personal Income Tax. If predictions are accurate, the Personal Income Tax will provide, therefore, only about 19% of the state's General Fund Revenues after Proposition #9 and the fiscal impact upon the state will be very significant. Of particular importance to California will be the fiscal impact upon school funding. The first negative effect will be experienced in the loss of state funding for school facility construction and maintenance because of the transfer of the Tideland Oil Revenues to the General Fund. A second implication will be an almost certain reduction in the level of state funds for allocation to local government in the form of Proposition #13 “bail-out” money, approximately 74% of which is paid to the schools, Kindergarten through the Community Colleges. A third implication will be the possibility of a significant reduction in the state's General Fund apportionment to the School Fund and in State Budget expenditures to finance categorical aid programs.

The standard dictionary definition of the verb “mitigate” is: “To make less harsh, severe, or painful.”

The proponents of Proposition #9, including Mr. Jarvis, are seeking to “mitigate” or make less “painful” the fiscal impact of Proposition #9. The mitigation is to be achieved by raising the Personal Income Tax rates for tax year 1980, and thereafter, above the level provided by Proposition #9.

Under “Minimum Mitigation,” the tax increase will be zero.

Under “Moderate Mitigation,” the tax increase will equal $1.4 billion for Fiscal Year 1980-81.

Under “Maximum Mitigation,” the tax increase will equal $2.0 billion in Fiscal Year 1980-81 and about $600 million each year thereafter.

Part I: Potential Responses to Proposition #9: Three Scenarios

Those who are interested in the fiscal implications of Proposition #9 upon the state and local government, including the schools, should realize that there are several ways of interpreting the effect of Proposition #9. In my original paper, dated January IS, 1980, and the two supplementary analyses which followed, three different sets of assumptions were used. As a consequence, the first-year impact, Fiscal Year 1980-81, is calculated as producing three different outcomes with respect to the state's revenue loss. I have classified them, therefore, on the basis of their net effect on the State Budget for that year as producing:

Minimum Mitigation (Scenario I)
Moderate Mitigation (Scenario II)
Maximum Mitigation (Scenario III)

When the fiscal implications resulting from the three sets of assumptions and fiscal data are projected into the second year, the results or effects are very similar and indicate that the impact of Proposition #9 will significantly impair the ability of the state to fund its fiscal obligations to state, local government, and the schools. Unfortunately, the proponents of Proposition #9 are ignoring Fiscal Year 1981-82, and thereafter, and are claiming that the opponents are employing scare tactics in their opposition to Proposition #9, and that the fiscal effects will be less serious than claimed. They then present an analysis or interpretation of the effect of Proposition #9 for Fiscal Year 1980-81 which is predicated upon assumptions reflected in either Scenario II, labelled Moderate Mitigation, or Scenario III, labelled Maximum Mitigation. In each instance, they assume that current law relating to the Personal Income Tax will be changed prior to the election on June 3rd and that the state's surplus will be considerably larger than was estimated in the early part of the year.

In my Jarvis II paper, written in January, 1980, I made no specific dollar calculations with reference to the effect of Proposition #9 after taking into consideration those variables relating to General Fund Revenue projections, increases in the Tideland Oil Revenues, or the magnitude of the Year-End Surplus. I merely stated that the state was confronted with a potential deficit for Fiscal Year 1980-81 of approximately a billion dollars, had a one-time surplus in June 1980 of $1.8 billion and would lose $4.9 billion in revenue during Fiscal Year 1980-81 if Proposition #9 were approved. I also commented that the Tideland Oil Revenues would be employed to offset future revenue losses from Proposition #9. If the available data had been used to estimate the first-year revenue loss, the conclusion would have been that the net Short-Fall or deficit would amount to approximately $4.5 billion: current revenues of $19.3 billion, plus the one-time surplus of $1.8 billion, minus the $4.9 billion Proposition #9 effect, equals a total revenue, ongoing and one-time, of $16.2 billion. If this is subtracted from the January 10, 1980, Budget of $20.7 billion and the Tideland Oil Revenues in the amount of $400 million are transferred to the General Fund, the Short-Fall will amount to $4.5 billion if $400 million is added to the state's Federal Revenue balance and these funds are maintained as a state Prudent Reserve in the amount of $550 million.

Since the analysis reflects the January 1980 state revenue estimates and surplus, it is no longer meaningful. A more current and responsible analysis produces what I classify as Scenario I, or Minimum Mitigation of the first-year effect of Proposition #9, and it is predicated upon certain assumptions with respect to the implementation of Proposition #9 and a moderate estimate of the increase in the state1s revenues and magnitude of the one-time surplus.

Scenario I — Minimum Mitigation

Assumptions: Current law remains unchanged and Proposition #9 is interpreted as becoming effective on January 1, 1980, and full indexing remains in effect as provided under existing law. The one-time surplus is estimated at $1.8 billion and the unanticipated state revenue increase is calculated to be $600 million, reflecting a 3% error in the January estimate. The Tideland Oil Revenues are estimated to be $500 million and that sum is transferred to the General Fund. The state1s current Federal Revenue Sharing money is calculated to be $150 million and a total of $400 million is added to that balance in order to create a responsible Prudent Reserve of $550 million. If the State Budget is reduced by the $400 million identified in the Duffy Report as a reserve for “economic uncertainties,” the Budget in 1980-81 will be $20.4 billion; however, a minimum of $400 million must be added to that amount to reflect the Tideland Oil Revenues to be allocated under the provisions of SB 1426 for the capital outlay needs of public education, Kindergarten through the University, and for the establishment of an Energy and Resources fund. When these proposed state expenditures are taken into consideration, the state's expenditures subject to reduction in 1980-81, after Proposition #9, will amount to $20.7 billion.

The first-year effect, utilizing these assumptions, is that the state's next year net deficit, or Revenue Short-fall, will amount to $3.8 billion after, of course, establishment of a Prudent Reserve of $550 million.

1980-81 Revenues = $16.9 billion, and Revenue Short-fall = $3.8 billion. When projected into 1981-82, Revenues = $18.8 billion, and the Revenue Short-fall = $4.0 billion, assuming a 13% revenue increase and a Budget increase of 10% over 1980.

Two other calculations, which are predicated upon different assumptions, I classify as Moderate Mitigation and Maximum Mitigation.

Scenario II — Moderate Mitigation

Assumptions: The Campbell legislation to change current law in order to make Proposition #9 effective in June, 1980, and to establish Personal Income Tax rates equal to 71% of the 1978 rates for the 1980 Tax Year, is enacted into law. It is further assumed that the state's revenues exceed the original estimate in the amount of $600 million, that the Tideland Oil Revenues are approximately $500 million, and that the federal Revenue Sharing Reserve is $150 million. The first-year effect, utilizing those assumptions, is that the state's net deficit will amount to $2.4 billion. This calculation is based upon the assumption that the state's expenditure reduction of $400 million through deletion of the appropriation identified in the Duffy Report as a reserve for “economic uncertainties” is offset by the planned $400 million expenditure for the capital outlay needs of public education and for the establishment of an Energy and Resources fund.

Fiscal Year 1980-81 Revenues = $18.3 billion, and the Revenue Short-fall = $2.4 billion. When projected into 1981-82, Revenues = $18.8 billion, and the Revenue Short-fall = $4.0 billion, assuming a 13% revenue increase and a 1980 Budget increase of 10%, and a decline in Personal Income Tax income in 1981-82 of approximately 53.5%.

Scenario III — Maximum Mitigation

Assumptions: The Imbrecht legislation is enacted into law and changes the effective date of Proposition #9 to January 1980, as provided in the Campbell legislation, and applies in 1980-81 the full indexing of the Personal Income Tax to the 1978 tax brackets and has the effect, therefore, of increasing the tax payments for this year and the future over the payments which would be made if the current indexing brackets remained in effect. The effect of these two changes in law will be to cause a significant one-year reduction of the state's revenue loss for fiscal Year 1980-81 from Proposition #9, which otherwise would occur in the magnitude of approximately $2.0 billion, and a modest ongoing reduction in the amount of $500 million. In addition, it is assumed that the state's unanticipated revenue increase for next year will be $700 million, that the State Budget contains a $400 million one-time reserve for “economic uncertainties” and that the Tideland Oil Revenues will increase by $400 million. If the Budget is reduced by the $400 million, the reserve for “economic uncertainties,” it will be $20.14 billion, but that will be offset by the $400 million to be allocated under SB 1426 for the capital outlay needs in public education and the establishment of an Energy and Resources fund. If all of the revenue sources are utilized except $400 million, which are added to the federal Revenue Sharing balance of $150 million in order to establish a Prudent Reserve of $550 million, the revenue loss because of Proposition #9 will be significantly reduced.

The first-year effect of Proposition #9, based upon these assumptions, is calculated to be in the amount of a Short-fall in 1980-81 of $1.8 billion, assuming a Prudent Reserve of $550 million is established.

Fiscal Year 1980-81 Revenues = $18.9 billion, and the Revenue Short-fall = $1.8 billion after the elimination from the Budget of the reserve for “economic uncertainties” and an augmentation by an equivalent amount, $400 million, for public education capital outlay needs and the establishment of an Energy and Resources fund. It is, also, assumed that $400 million is allocated from the state's revenues for the creation of a Prudent Reserve of $550 million, of which $150 million is federal Revenue Sharing money. When projected into 1981-82, Revenues = $19.3 billion, and the Revenue Short-fall = $3.5 billion, assuming a 13% increase in the state's revenues and a 1981-82 Budget increase of 10% over the previous year.

Conclusion

Scenario II — Moderate Mitigation seems to be most likely to occur. If that proves correct, the state's estimated Revenue Short-Fall for 1980-81 will be $2.5 billion, assuming a Prudent Reserve, and $4.0 billion in 1981-82.

The two-year average Revenue Short-Fall will be approximately 15% of what could have been budgeted had Proposition #9 not been approved, or approximately 12% in 1980-81 and 18% in 1981-82. It is interesting to note that in Fiscal Year 1979-80, the current year, the state's General Fund expenditures are $18.7 billion. Assuming that Moderate Mitigation occurs, state expenditures will be $18.2 billion in 1980-81, and in 1981-82 they will be $18.8 billion.

In Fiscal Year 1981-82, the state will have a Budget approximately equal to that in Fiscal Year 1979-80, the current year, after two years of unusual inflation.

Addendum

An alternative analysis predicated upon a projection of the state's revenues for 1980-81, after reduction of the revenue loss from Proposition #9, at a rate of increase equal to 11%¹, produces very similar fiscal results with respect to fiscal Year 1981-82 State Revenues and the Budget Short-fall for that year. In the alternative analysis, the assumption is made that the retroactive implementation of Proposition #9 to January 1, 1980, is repealed and that there is no change in the current tax brackets for indexing the Personal Income Tax.

After the revenue calculation which reflects these assumptions is made and the $600 million in Tideland Oil Revenues are added to the state's revenues, the resultant total can be regarded as the General fund Revenues available for expenditure in 1981-82.

Under both the Minimum Mitigation and the Moderate Mitigation Scenarios, given these assumptions, the Revenues = $18.9 billion, and the Budget Short-fall = $3.9 billion.

Under the Maximum Mitigation Scenario, the assumption of which is that the Imbrecht legislation is enacted, the Revenues = $19.5 billion, and the Budget Short-fall = $3.3 billion.

Part II: Impact of Campbell Legislation to Make Proposition #9 effective in June, 1980, rather than in January, 1980

Evidently, Howard Jarvis is apprehensive about the first-year revenue loss estimated to result from voter approval of Proposition #9. That estimated loss is $4.9 billion, or approximately 25% of the state's projected revenues for Fiscal Year 1980-81. Because of his apprehension and because he claims that he did not intend the amendment to become effective as of January 1, 1980, which is a mandate of existing tax law², Mr. Jarvis is supporting a bill, SB 1464, authored by Senator William Campbell, which will (1) make the amendment effective on June 4th upon its certification of voter approval by the Secretary of State, and (2) provide a 1980 Calendar Year tax rate of approximately 71% of the 1978 tax rate, rather than the 50% required by the specific language in the Jarvis Initiative.

It has been suggested that such action may be of questionable constitutionality; however, it has widespread political support despite the fact that it will increase the 1980 tax rates above the level to be established by Proposition #9, and there is reason to believe that it may become law and its constitutionality upheld.³

If the Campbell legislation is enacted and the tax rate for the Calendar Year 1980 is increased from 50% to approximately 71% of the 1978 rates, the potential $4.9 billion revenue loss in Fiscal Year 1980-81 from Proposition #9 will decline to an estimated $3.5 billion.

The important factor, of course, is that, although this will provide a reduction in the first-year estimated revenue loss because of Proposition #9 from $4.9 billion to $3.5 billion, it will not affect future years. In the years following, the state's revenue loss will be of a magnitude to reflect approximately a 53.5% reduction in the state's Personal Income Tax, a loss calculated in 1981-82 to be approximately $4.2 billion, which will increase in fiscal years thereafter.

The projected state resources for June of 1980 have increased slightly over the estimate which was made in January. The margin of error in the estimate has been calculated to be in the neighborhood of 2% to 4% of the January projection.⁴ I have concluded that an error in the amount of 3% is responsible and an error of that magnitude will result in revenue receipts of $600 million over the estimate.

Assuming that the Year-End Surplus is increased by that amount, the surplus money available to offset the revenue loss because of Proposition #9 will amount to $2.4 billion and not the $1.8 billion surplus as previously estimated. Furthermore, additional revenues in the amount of approximately $500 million above that anticipated in the Governor's Budget may be transferred to the General Fund as a result of the decontrol of heavy oil prices.⁵ Since the state normally maintains a Prudent Reserve as security against a decline in its revenues because of adverse economic conditions, it may be assumed that $400 million of the surplus will be used for that purpose and that it will be augmented by the state's Federal Revenue Sharing money, approximately $150 million, which would establish the reserve at a level of $550 million.⁶

On the basis of these assumptions, one can make some interesting projections about the magnitude of the revenue and expenditure reductions in Fiscal Years 1980-81 and 1981-82 which will result because of voter approval of Proposition #9.

The state's revenues for Fiscal Year 1980-81 were estimated in January to be $19.3 billion. If it is assumed that the state's General Fund Revenues are reduced by an estimated $3.5 billion, to reflect the first-year implementation of Proposition #9, presuming the Campbell legislation is enacted, the state's revenues will decline to the level of $15.8 billion. If the one-time or Year-End Surplus is added to that revenue estimate in the amount of $1.8 billion and if it is further augmented by $600 million from increased state revenues, the General Fund dollars available to fund the 1980-81 Budget will be in the amount of $18.3 billion. That will consist of the state's ongoing revenues after Proposition #9, the Tideland Oil Revenue increase, and all of the one-time surplus, with the exception of the Prudent Reserve in the amount of $550 million.⁷

The State Budget, however, assuming no augmentations are approved by the Legislature prior to voter approval of Proposition #9, will be in the amount of $20.75 billion. The Duffy Report identifies a $400 million reserve for “economic uncertainties” in the 1980-81 Budget, and if that is deleted, the Budget will be $20.33 billion. It is important to realize, however, that administration-sponsored legislation, SB 1426, to utilize a portion of the increase in Tideland Oil Revenues to establish an Energy and Resources Fund and to finance school construction and maintenance for all segments of education, Kindergarten through the University, will establish the level of support at an annual amount of about $400 million. This expenditure, of course, is not included in the Budget as introduced, and since it is planned to finance those needs with the Tideland Oil Revenue increase which will be transferred to the General Fund as an offset to the Proposition #9 revenue loss, the state will be deprived of the fiscal ability to proceed in the financing of these very urgent needs; it is reasonable, therefore, to include that amount, $400 million, as an ongoing state expenditure. It will offset the $400 million reduction in the Budget which was achieved through the elimination of the reserve for “economic uncertainties”; thus, the state's expenditure level appropriate for calculating the Proposition #9 Short-Fall should be established at the $20.7 billion level provided in the Budget when introduced in January.

If the voters approve Proposition #9, the Budget for 1980-81 will have to be reevaluated and placed upon the Governor's desk in an amount not to exceed the state's projected revenues of $18.3 billion; it will have to be reduced, therefore, in the amount of $2.4 billion, or approximately 12% of the original Budget expenditure.

Projection for 1981-82

In order to determine the impact of Proposition #9 on Fiscal Year 1981-82, an assumption may be made that the state's 1981-82 revenue base will reflect an increase of 13% over the previous fiscal year.⁸ This increase is equal to a three-year average percentage increase, 1978-79, 1979-80, and 1980-81, and the last year, however, 1980-81, is only an estimate of the increase over 1979-80. It might be argued that the percentage of increase should be estimated at a lower rate because of the fact that full indexing of the Personal Income Tax will be in effect and because Proposition #9 will result in an annual loss of 53.5% of the state's Personal Income Tax, which in 1980-81 was estimated to account for 35.7% of General Fund Revenues.⁹ The loss of revenues from those two changes in the Personal Income Tax will significantly affect the total revenues that the state can expect to receive, not only in 1980-81, but in 1981-82 and each fiscal year thereafter. That loss will reduce the state's revenue elasticity, or the tendency for revenues to increase at a rate greater than the increase in the state's Gross National Product. A 13% estimated increase in revenues, therefore, considering the impact of indexing and the 50% reduction in Personal Income Tax rates amounts to what I think is a responsible figure.

The assumption is made that the estimated 1980-81 state revenues in the amount of $19.3 billion are augmented by the $600 million increase in state revenues over the $19.3 billion estimate. As a consequence, the revenues are $19.9 billion and that amount is adjusted to reflect a 13% rate of increase for 1981-82.

Based upon those data, the state's total revenues in 1981-82 would, under the current tax rate or voter rejection of Proposition #9, amount to $22.5 billion. This may be increased by its augmentation of $600 million in Tideland Oil Revenues.¹⁰ The total revenues would be $23.1 billion and these revenues would constitute the only source of funding available to the state in Fiscal Year 1981-82 since there will be no “carry-over surplus,” all of it having been exhausted in Fiscal Year 1980-81 as an offset to Proposition 9.¹¹

The 1981-82 Budget may be assumed to increase at a rate of 10% over that of 1980-81: $20.75 billion plus $2.07 billion. The amount, therefore, will equal $22.8 billion.

The Personal Income Tax currently is producing about 35.7% of the state's General Fund; therefore, assuming that Proposition #9 is approved, the loss in revenue from that source will amount to 53% of 35.7%, or 19% of the state's General Fund. Such a percentage of the state's tax base would amount to a $4.3 billion reduction in the revenues which would have been collected absent approval of Proposition #9. Deducting that revenue loss from the estimated $23.1 billion of the state's total revenue, the result is $23.1 billion minus $4.3 billion, or $18.8 billion, and that will be the General Fund revenue base for Fiscal Year 1981-82, or $100 million more than is being spent in Fiscal Year 1979-80, the current year. The Short-Fall will be $4.0 billion, or a Budget of $22.8 billion minus revenues of $18.8 billion.

Interestingly, the result is the same for the Minimum Mitigation Scenario if a 1981-82 projection is made, since the basic assumptions are the same and since the Campbell legislation is effective only in the first year and has no impact upon the second year, 1981-82, or succeeding year revenues.

Conclusion

The critical factors affecting the state's fiscal situation if Proposition #9 is approved are:

There is no huge, $1.8 billion, one-time surplus remaining after Fiscal Year 1980-81, only a Prudent Reserve of $550 million, the maintenance of which is essential to sound fiscal management and the protection of the state's fiscal solvency.
Since the State Budget must not exceed estimated revenue projections for any fiscal year, future revenues will determine the level of state expenditures, unless, of course, a one-time surplus develops, or if Proposition #4 mandates a spending level below revenues.
Personal Income Tax Revenues, as a consequence of Proposition #9, will decline by approximately 53.4% and will contribute about 18.6% of the General Fund Revenues instead of the 35.7% as estimated in the Budget for 1980-81. This estimate is for Fiscal Year 1981-82.

The state has two basic options: (1) imposing the reduction in expenditures totally upon state allocations and subvention to schools and local government, particularly county health and welfare allocations; or (2) distributing the state's revenue loss in such a manner as to reduce total government expenditures in California—state, cities, counties, special education, and the schools.

To accomplish the above result, the state will have to enact a number of changes in current law:

Modify the deflator mechanism in AB 8.
Reduce the amount of school property taxes transferred to other segments of local government as provided in AB 8.
Reduce the amount of tax relief allocated to local government because of the homeowner exemption, the business inventory buy-out, the Williamson Land Conservation Act and revenues raised by the cigarette tax and transferred to local government.

In any event, substantive changes in the present state response to Proposition #13 will result and government will experience a decline in its level of support.

The fiscal impact of Proposition #9, assuming (I) the Campbell legislation is enacted, (2) the state's revenues are $600 million above the January estimate of $19.3 billion, and (3) the Tideland Oil Revenue increase in the magnitude of about $500 million is transferred to the General Fund, is calculated as follows:

Fiscal Year 1980-81 estimated Budget reduction of about 12%, or $2.4 billion if a Prudent Reserve of $550 million is maintained.
Fiscal Year 1981-82 estimated Budget reduction of about 18% from the normal State Budget for that year, or approximately $4.0 billion.
Two-year revenue loss of $6.4 billion, assuming a Prudent Reserve is maintained of $550 million.

State level of General Fund expenditures will be as follows:

1979-80 $18.7 billion

1980-81 $18.3 billion (assuming a Prudent Reserve of $550 million)

1981-82 $18.8 billion (assuming a Prudent Reserve of $550 million)

Obviously, drastic Budget reductions will have to be made over the two-year period.

It is now recognized that the state's economy may experience a decline beginning in the third quarter, July to September. If this occurs, the state revenues may decline in Fiscal Year 1980-81. That could easily exhaust the Prudent Surplus. If the result were greater than the magnitude of the surplus $550 million, the effect in 1981-82 would be more serious than the 1981-82 revenue loss of $4.0 billion. It could rise to $4.5 to $4.8 billion, depending upon the magnitude of the economic slowdown; a 5% reduction in state revenues could produce a net $800 to $900 million revenue loss.

Furthermore, if inflation continues at a high rate into 1980-82, the 10% Budget increase may be inadequate. If it were increased by 2%, to 12%, the normal Budget would increase by about $500 million in 1981-82, which would increase the revenue deficiency that Proposition #9 would produce in that year.

Part III: Impact of Imbrecht Legislation re Indexing of Personal Income Tax and Implementation of Proposition on January 1, 1980

The Vice Chairman of the Assembly Ways and Means Committee, Assemblyman Gordon Duffy, has published a very scholarly paper on the impact of Proposition #9.

It presents a number of options for estimating the first- year effect of Proposition #9 if approved by the voters on June 3. This is an analysis of that impact based upon three assumptions which will most significantly reduce the first-year (1980-81) revenue loss resulting from Proposition #9.

The assumptions are:

A very liberal estimate of the state's surplus at the end of Fiscal Year 1979-80.
Enactment of legislation to repeal the retroactive provisions of current tax law which relate to the implementation of Proposition #9, SB 1464, Campbell, and AB 3020, Imbrecht.
Enactment of AB 3020, Imbrecht, to implement Personal Income Tax indexing in Tax Year 1980, as required by the Bergeson Act, AB 276, 1979 Session, but at the tax brackets in effect for Tax Year 1978.

The total fiscal effect of a very liberal estimate of state revenues and a Personal Income Tax increase in Tax Year 1980, which are the essential elements of these assumptions, would be significantly to reduce the state's revenue loss from proposition #9 in Fiscal Year 1980-81. The effect will be substantively to mitigate, therefore, the negative impact of Proposition #9 during the first year of its implementation. In the second and succeeding years, however, the state's Revenue Short-Fall will become quite large and, unfortunately, the second-year, or 1981-82, impact of Proposition #9 is being ignored by the proponents of Proposition #9, and it was not addressed in the Assembly Ways and Means Committee Report.

The general consensus is that, predicated upon the above-mentioned assumptions, the first-year (1980-81) effect will be to reduce the projected state revenue loss, as a consequence of voter approval of Proposition #9, from an estimated amount of $4.9 billion, if the state's revenue increase and its one-time surplus are disregarded, to a level of $1.8 billion. Since the legislative change to reduce the Revenue Short-fall from Proposition #9 will be effective only for one year, fiscal Year 1980-81, and since the state's 1980-81 Year-End Surplus will be exhausted, the state will experience in Fiscal Year 1981-82 to a much greater degree the adverse fiscal effects of Proposition #9. As a consequence, the state's revenues for that year, 1981-82, and thereafter, will decline significantly from the level which normally would accrue to the General fund, and this could prove of critical importance to the state. The following calculations indicate the basis for that revenue projection.

If the state's estimated 1980-81 General Fund Revenues of $19.3 billion are increased by $700 million, the revenue increase which the Duffy Report indicates to have occurred over the original January 1980 projection, the state's General Fund Revenues will equal $20.0 billion. If a transfer of Tideland Oil Revenues to the General Fund in the amount of $500 million is made, the total revenues available to the state will attain a level of $20.5 billion for Fiscal Year 1980-81. If from that amount the $3.0 billion tax reduction which is estimated to result from Proposition #9 is deducted¹², after enactment of the Imbrecht legislation, the state’s available revenues will amount to $17.5 billion. If that revenue base is augmented for 1980-81 by the addition to it of the estimated $1.8 billion, one-time Year-End Surplus for Fiscal Year 1979-80, the state will have a total revenue source to fund the State Budget in 1980-81 in the magnitude of $19.3 billion. If $400 million is added to the $150 million Federal Revenue Sharing Reserve, the state will have a Prudent Reserve of $550 million and a revenue source of $18.9 billion. State expenditures, as provided in the Budget as introduced on January 10, 1980, will amount to $20.7 billion, and if the assumption is made that that amount is reduced by $400 million, the amount budgeted for “economic uncertainties,” the Budget will amount to $20.3 billion. Since that reduction will be offset by the $400 million to be allocated from Tideland Oil Revenues for the creation of an Energy and Resources Fund and for public education capital outlay under the provisions of SB 1426, the Budget must be reduced by $1.8 billion, assuming the maintenance of the $550 million Prudent Reserve, and by $1.4 billion if only the $150 million in Federal Revenue Sharing is retained as a State Budget Reserve.

Projections for 1981-82

In making an estimate of the state's revenues for the next year, 1981-82, I utilized the estimated General Fund Revenues of $19.3 billion for Fiscal Year 1980-81 as a base and increased that amount by the addition of the unanticipated revenue increase of $700 million. The result is an ongoing revenue base of $20.0 billion for Fiscal Year 1980-81. By adjusting that amount for a 13% increase, which is 1% less than the average rate of increase for the last two years, the total revenues available to the state for General Fund expenditures for 1981-82 can be expected to attain a total of $22.6 billion, and if $600 mil1'ion from the Tideland Oil Revenues is added to that amount, the General Fund Revenues will be $23.2 billion.

That $23.2 billion in revenues available for 1981-82 must be reduced, however, if Proposition #9 is approved, since the Personal Income Tax rates will be established at 50% of the 1978 rates. That reduction can be estimated through a calculation of the personal Income Tax loss. In 1980-81, the Personal Income Tax Revenues produced approximately 35.7% of the General Fund income; if that percentage were to continue into 1981-82, the Personal Income Tax could be expected to generate $8.3 billion of the state's $23.2 billion in revenues for that year. Because of the effect of Proposition #9, however, that revenue estimate must be reduced and the reduction will be in the amount of $4.39 billion, or 53% of the Personal Income Tax which otherwise would be collected.¹³ If that amount is deducted from the estimated revenues of $23.2 billion, the General Fund income source will decline to $18.8 billion in Fiscal Year 1981-82. Since the Imbrecht legislation will increase state Personal Income Taxes because of its reversion to the 1978 tax brackets, an additional $400 million should be added to that amount for a total revenue base of $19.2 billion. In addition to this revenue, however, the state will possess as a carry-over the Prudent Reserve of $550 million established in the previous year, 1980-81.

For the purpose of further analysis, one may assume that the Budget for 1980-81, as introduced, is not increased by 13%, the percentage increase applied to the state's revenue, but by only 10%. That would constitute a very responsible level of increase and will produce an hypothetical level of state expenditures for the 1981-82 Budget Year equal to $22.8 billion. In addition, of course, there will be available the previous year's Prudent Reserve of $550 million, apart of which is the $150 million in Federal Revenue Sharing money.

Since expenditure reductions will have to be made, because the amount of the state's General Fund Revenues will determine the amount the state may spend, the Budget may not exceed $19.2 billion, which is $3.6 billion below the “normal” expenditure level.

Conclusion

In the 1979-80 Budget, the one now in effect, the expenditure level for General Fund purposes is $18.7 billion. On the basis of my estimate of the “Imbrecht effect,” or the Maximum Mitigation of the first-year revenue loss from Proposition #9, the estimated state expenditures which may be incurred in 1980-81 will be $18.9 billion. On the basis of the calculations which I have explained and which are also predicated on the “most favorable” assumption, the state may project an expenditure level for Fiscal Year 1981-82 of approximately $19.2 billion. In effect, after three years of severe inflation, the state may spend in 1981-82 approximately $500 million more than was budgeted in Fiscal Year 1979-80, the current year.

The deflator mechanism will be implemented, as provided in AB 8, in Fiscal Year 1980-81 since that must occur if the state's fiscal resources, both ongoing revenues and the Year-End Surplus, are estimated to be $100 million less than $20.5 billion. When that takes place and if no reductions in the state's Budget are implemented, and if the deflator mechanism is applied pursuant to current law, 50% of the reduction must be experienced by the schools for a total state revenue loss of approximately $900 million in 1980-81. An equal amount would also be withheld from state allocations to other segments of local government. As a consequence, the bail-out, which began in 1978 at $4.3 billion, would be reduced in 1980-81 from a level of $5.3 billion to considerably less, or about $3.9 billion, an amount below that provided in 1978-79 in SB 154.

The impact will be so dramatic that the deflator will have to be rewritten. Of course, those expenditures which relate exclusively to state services could be reduced and that action would mitigate the impact of the deflator mechanism upon the schools and other segments of local government; but even if that were done, the revenue loss to local government would still be substantive.

Furthermore, in the following year, 1981-82, the state's fiscal situation will be even more tenuous, and there is no question that very significant and controversial decisions will have to be made in the determination of the appropriate expenditure reductions, state and local. It will not be as simple a challenge as was that in 1978, when the state responded to the implications of Proposition #13 in SB 154.

¹The Legislative Analyst's Budget Analysis for 1980-81 indicates that state revenues increased in 1979-80 over 1978-79 at a 16.8% rate. It is estimated, however, that the increase in 1980-81 revenues over 1979-80 will be at an 8.5% rate, the decline being largely the result of the impact of the 1978 one-time tax credit and full indexing of the Personal Income Tax upon Tax Years 1980 and 1981. Had the one-time 1978 tax credit and the full indexing effect been disregarded, the estimated revenue increase for 1980-81 would have been 12.3%. To assume a revenue increase in the magnitude of 11% is, therefore, a responsible compromise which, if it has a bias, has one favorable to Proposition #9.

²Revenue and Taxation Code, Div. 2, Part 10, Section 17034.

³Legislative Counsel's Opinion, March 7, 1980, re the constitutionality of the provisions of SB 1464. If a bill authored by Assemblyman Imbrecht, AB 3020, is enacted, the tax savings from the retroactive implementation of Proposition #9 will be repealed and, also, the indexing of the Personal Income Tax, as provided in current law, will be repealed and the 1978 tax brackets made applicable in 1980. This will result in another tax increase for 1980-81 in the magnitude of $500 million in addition to the $1.4 billion which will result from the repeal of retroactivity. .The Imbrecht bill will, therefore, increase Personal Income Taxes in 1980 by $1.9 billion over what is current law in the event that Proposition #9 is approved.

⁴As of February 29, 1980, the revenues were 2-1/2% greater than estimated, the same percentage as that produced on January 31, 1980. Report on General Fund Disbursement issued by Kenneth Cory, State Controller.

⁵SB 1426, legislation sponsored by the administration, and now in the Assembly, will provide that a large percentage of this money will be used to finance Capital Outlay for the schools, K through the University, and the Energy and Resources Fund. If transferred to the General Fund, money for school construction and conservation and development of renewable energy sources will be practically unavailable.

⁶Federal Revenue Sharing money may not be regarded as on-going income since there is a strong likelihood that the program will be repealed by Congress in its attempt to balance the Federal Budget.

⁷The Reserve, as stated, will consist of a $400 million one- time allocation from the state's increased revenues and $150 million in Federal Revenue Sharing money.

⁸Legislative Analyst Analysis of the Budget Bill for Fiscal Year 1980-81, p. A-29, Table 15. Had the effect of the one-time tax credit increase and full indexing of the Personal Income Tax been excluded, the revenue increase would have averaged over the three-year period, 1978-79, 1979-80, and 1980-81, at 14.5%.

⁹This revenue reduction will occur even if the Imbrecht bill to change the tax brackets is enacted, since full indexing will begin in 1981-82.

¹⁰Tideland Oil Revenues are anticipated to reach a maximum level in 1982-83, between $600 and $700 million, and to decline thereafter. This is the most optimistic projection of the State Lands Commission.

¹¹If in Fiscal Year 1980-81 the Prudent Reserve remains intact, it will be available to offset a Budget deficit which might result as a consequence of a serious slowdown in the economy and a decline in revenues.

¹²This reflects a reduction from the $4.9 billion revenue loss as a consequence of the enactment of the Imbrecht legislation to repeal the retroactive implementation of Proposition #9 and to initiate indexing of the Personal Income Tax in Tax Year 1980 based upon the 1978 tax brackets.

¹³This percentage reflects the fact that Proposition #9 will halve the tax rates, but cause a 53% to 54% loss of revenues to the state because of the fact that tax credits remain at current levels.

Fiscal implications of Jarvis II

2008-10-04T11:00:00.000-07:00

The Rodda Project: The battle against Proposition 9 (1980)

The background to Sen. Rodda's paper

Howard Jarvis and his allies hit the ground running after their success with Proposition 13 in 1978. After slashing California's property taxes, the tax rebellion forces offered up a state spending cap (passed by the voters as Proposition 4, the Gann initiative) and then took aim at the state personal income tax. Proposition 9 on the June 1980 primary ballot mandated a 50% cut in income tax rates.

Senator Rodda and his legislative colleagues had swung into action after the passage of Proposition 13 and enacted legislation that distributed the state surplus in such a way as to soften the initiative's impact on schools and local government. Their success, however, enabled Jarvis and others to crow that pre-election predictions of disaster had not come to pass. Proposition 13 had obviously not destroyed the state.

The surplus, however, was rapidly vanishing and the Proposition 13 bail-out could not continue indefinitely. Jarvis decided to strike with Proposition 9 (often called Jarvis II) in 1980 before any long-term effects of Proposition 13 were experienced. The anti-13 legislators were, he said, already exposed as mendacious doomsayers, so why believe them if they declared that Proposition 9 was an even worse idea than Proposition 13?

Undeterred, Albert Rodda delved into the provisions of Proposition 9 and carefully analyzed the initiative's scope and the magnitude of its potential impact on California's fiscal health. He drafted a detailed report and released it to the public. Many copies flowed out of his office as people clamored to learn more about the likely impact of enactment of Proposition 9. The eventual defeat of the measure was in large part due to Rodda's trenchant document.

Rodda's report sparked some quick political maneuvers by Proposition 9 supporters in the legislature, some of whom introduced bills to soften (at least initially) the impact of the measure. A follow-up to this report presented the Senator's detailed analysis of the mitigation measures.

—TB

Fiscal Implications of Jarvis II for the State of California and Agencies of California Local Government, including the Schools, as Viewed from the Perspective of a Practical Politician

January 15, 1980

The first three parts of the paper are an exposition of different aspects of the state's fiscal situation, present and future. The parts are related to each other, however, and, thus, are combined into one package. This tripartite approach to the problem accounts for the fact that portions of the paper are quite repetitious. Style and form have been sacrificed for substance and analysis. The fourth part is a brief analysis of the effect of Oil Deregulation on California Revenues. The fifth part is an article written in response to a request by the Capitol News Service and it presents an overall perspective of the impact of Proposition #13 (Jarvis-Gann), Proposition #4 (Gann), and Jarvis II. The sixth is an analysis of the basis for determining the first-year loss of revenue to the state as a result of approval of Jarvis II.

Introduction

Last Fall, I was impressed with statistical material prepared by the Legislative Analyst's Office which related to the state's fiscal situation. The data indicated that the state was experiencing ongoing annual deficits which were dramatically reducing a very substantial General Fund Reserve. This trend, since it is still in effect, must be interpreted to mean that the state's fiscal future will not be bright and that reductions in state expenditures and “bail-out” to local government will have to be implemented. Because of the implication of these conditions, I became very apprehensive about the potential effect upon the state of voter approval of the initiative being circulated which would mandate that the state personal income tax be reduced by 50%. These concerns convinced me to write a paper which would present as clearly as possible the implications of both the current deficit and the income tax reduction initiative. In doing so, I addressed a number of issues which related to r my concerns, knowing that there would be discrepancies between the projections of revenues and expenditures that I would have to use in the analysis and the actual data which would ultimately be developed as a reflection of the fact of reality. I intended to release the paper in December, 1979, but the complexity of the issues prevented me from meeting that deadline. I decided, therefore, to postpone the completion of the paper until the full data relating to the State Budget for 1980-81 were available for inclusion in the estimates and predictions. Thus, the delay. The reader should use the paper in order to gain a better understanding of the fiscal problems which will confront the state and local government in 1980 and thereafter, and the potential responses which will be available to the Legislature for introduction into the 1980-81 Budget. Care should be exercised in the presentation or interpretation of the data because of the lack of certainty or accuracy which exists with respect to such complicated fiscal projections , given the uncertainty of economic and political conditions and circumstances which affect such data. The same caution should be exercised with regard to the validity of data used in contradiction of the conclusions presented to the readers. All of us suffer from the same deficiency—the inability to forecast with accuracy complicated data projections. I am convinced, however, the deficiencies which emerge will be of a marginal character only.

In conclusion, I must comment that all of the data have been carefully reviewed by the Legislative Analyst and constitutes the most accurate and meaningful material that is available to me, as a State Senator and Chairman of the Senate Finance Committee.

Justification for support of the personal income tax amendment reflects, of course, the conviction that the statistical data are supportive of such a reduction in the state's revenues. Arguments to that effect were presented by Howard Jarvis in the form of two letters distributed to voters last year. The first was mailed in May and the second in early Fall. Copies are included as pages (i) and (ii).

Part I

Fiscal Background for Analysis of Jarvis II

The California economy experienced an unusual rate of growth during the second half of the decade of the 1970'5. During part of this period, because of the elasticity 0£ its tax base, state revenues grew much faster than state expenditures. As a consequence, when Proposition #13 was approved by the voters on June 6, 1978, the state had accumulated a General Fund surplus of $3.7 billion. The first and immediate impact of Proposition #13 was a $6.9 billion reduction in local property tax revenues. Because of its accumulated surplus, the decision was made at the state level not to expose local governments to the full and adverse impact of such a huge loss in their revenues. Instead, it increased its surplus by a reduction of state expenditures by approximately a billion dollars and, through the utilization of that augmentation of the surplus in conjunction with a large portion of the previously accumulated surplus, provided a massive amount of fiscal relief to local governments and the schools. The first-year replacement revenue was $4.3 billion in the 1978-79 fiscal year and that amount was increased to $4.8 billion in 1979-80, the second year.

Fortunately, the state through this action replaced about two-thirds of the Proposition #13 property tax loss and, as a result, local governments, including the schools, were spared the economic and social disruptions which normally would have accompanied such a dramatic change in their finances. State government, however, paid a price for coming to the aid of local governments because the state committed itself to spend a substantial portion of its revenues for the support of local government and the public schools and, as a consequence, diminished its ability to finance areas of public service traditionally recognized as the responsibility of the state. The response to Proposition #13 resulted, therefore, in a fundamental change in state finance.

During the four years prior to the enactment of SB 154, the Proposition #13 “bail-out” legislation in June, 1978 , state revenues exceeded state expenditures; immediately upon its enactment, however, the state's fiscal condition was reversed and state expenditures, including those for local government “bail-out,” increased to a level which exceeds revenues by about a billion dollars per year and the excess of expenditures over revenues, or deficit, had to be offset at the end of each fiscal year by a draw-down of the state's accumulated surplus. This was an unprecedented phenomenon. Never in its history, as I recall, had the state experienced such a situation—annual deficits during a period of unusual inflation and economic growth. The reality of the state's fiscal situation, despite this unique trend, is that if California does not experience a recession, because of the existence of a General Fund Reserve of more than a billion dollars, the state probably can continue its current level of local governmental aid for at least one more year (i.e., 1980-81). Thereafter, however, the situation is less favorable, since no longer will there be sufficient surplus funds in the State Treasury to offset the deficit, or the ongoing deficiency between General Fund revenues and total expenditures, and fully fund the “bail-out” of local government at the current level of $4.8 billion.

These fiscal observations are related exclusively to the relation between current expenditures and current revenue sources only; they do not reflect the potential effect upon the state's fiscal situation of voter approval of the Income Tax Initiative, or the so-called Jarvis II Initiative, which will be on the June 3, 1980, ballot. That action would reduce state revenues by an estimated $4.9 billion in 1980-81, which is the equivalent of a 25% loss in state General Fund revenues. Obviously, if that were to occur, the state's fiscal situation must be analyzed from a totally different perspective from that of “business as usual.” The loss of state revenue will be of such a magnitude that the ability of the state to provide replacement revenues for the Proposition #13 local tax reduction and at the same time finance its own services and public education will be dramatically and negatively affected.

One of the unfortunate aspects of the current fiscal situation is the confusion which relates to the mechanics of state finances, especially as it relates to the terms of annual surplus, or deficit, and “Year-End Surplus” or General Fund Reserve.¹ These concepts, however, are important for an adequate understanding of state finances and an evaluation of the state's ability to continue local fiscal relief and to withstand the possible impact of Jarvis II.

The Annual Surplus, or Deficit, represents the difference between revenue collections and expenditures during a single year. In terms of personal experience, it may be compared to the changes which occur in one's monthly checking account. For example, since during some months one spends less than one's paycheck, one experiences a surplus which increases the checking balance. That excess may then be deposited in one's savings account and be available for future needs. If one spends more than one receives in income over a period of time and incurs a deficit, money may be transferred from the savings bank into the checking account. If too many deficits are incurred, the savings account will decline to zero and one will have to reduce one's spending and balance expenditure with monthly income. The history of state finance reveals that a similar situation can occur, and has occurred, on an annual and continuing basis. Chart I portrays that situation. During 1977-78, when General Fund revenues were $13.7 billion and expenditures were $11.8 billion, the state experiences an annual surplus of $1.9 billion. In the following year (1978-79), when revenues increased to $15.2 billion, expenditures rose to $16.2 billion, and, therefore, the state incurred a $1 billion annual deficit.

Annual surpluses add to and annual deficits subtract from the Year End Surplus, and this is what confuses the public—the distinction between the Annual Surplus, or Deficit, and the Year-End Surplus, or General Fund Reserve. They fail to realize that, at the end of each fiscal year (June 30), when the State Controller computes the total or accumulated surplus, he includes in the total the excess of revenues over expenditures during that fiscal year and, also, any surpluses carried forward from all previous fiscal years. The so-called surplus represents, therefore, the total amount of uncommitted General Fund money at that particular point in time. In effect, it is a one-time surplus, as distinct from an ongoing surplus, and, unless it may be counted upon to continue over time because of favorable Budget conditions, it may not be used to finance expenditure which will persist on an ongoing basis. During the past three years, the public has become confused and has become convinced that the Year-End Surplus will continue into the future and this confusion has engendered the public's frustration with the Legislature and reinforced its demand for a tax reduction. The citizenry is convinced that such a reduction in revenues would not impair the quality of government but would merely return the “Surplus” to the people or the taxpayers—a “rightful” thing to do.

Hereafter, I shall refer to the Year-End Surplus as the General Fund Reserve, or all of the accumulated liquid assets which the state possesses and which it may use to fund its operations, or to balance the Budget. Chart I shows the history of the relation between the state's Annual Surplus and General Fund Reserve over the last five years. It indicates:

The General Fund had an annual deficit of about $440 million during 1973-74. This occurred because the state sales tax rate was temporarily reduced during that year. Because of a General Fund Reserve, this deficit did not result in an unbalanced State Budget.
The state had modest annual surpluses during 1974-75 and 1975-76, which, because of the strong resurgence in the economy, grew dramatically during the next two years and reached a peak of $1.9 billion in 1977-78. The trend reversed itself in 1978-79, and the state experienced a .$1 billion annual deficit.
The General Fund Reserve grew from $180 million on June 30, 1974, to $3.7 billion on June 30, 1978, a growth which was directly related to consecutive occurrences of annual surpluses.
In 1978-79, the General Fund Reserve declined to $2.7 billion, a direct result of the fact that state expenditures exceeded revenues by about $1 billion and that deficiency in revenues was offset through a withdrawal from the Reserve.

The fiscal outcome for 1979-80, the current fiscal year, is somewhat uncertain, since we are halfway through the year and the data with respect to expenditures and revenues and their effect on the Annual Surplus are estimates only and remain contingent upon events which will transpire between now and July.

The Governor's Budget, which was presented to the Legislature on January 10, 1980, indicates that the General Fund Reserve will be in the neighborhood of $1.8 billion as of June 30, 1980 (Year-End Surplus). The Budget contains the administration's recommendations for spending during the next fiscal year, but historically the Budget, as introduced, is modified as the result of extensive review by the Legislature. Changes certainly can be expected to result from that review—some in the form of expenditure reductions and others in the form of augmentations. Predictions, therefore, at this time as to the next fiscal year situation, 1980-81, contain definite uncertainties. To make forecasts beyond the next fiscal year is even more difficult and, obviously, any estimates projected for 1981-82 must be understood to be very tenuous, at best.

We can, however, gain an insight into the trend of state finances over the next two years if we make the assumption that total state expenditures, including local fiscal relief, will not be allowed to grow faster than the rate of inflation, plus the growth in population, and compare estimated expenditure figures predicated upon those assumptions with the long-term revenue projections prepared by the Legislative Analyst last summer.

This comparison, which is the “projected” portion of Chart I, indicates that the General Fund Reserve will continue to decline during 1980-81, and that by the end of 1981-82 there will be a potential for a $900 million deficit. Since the State Constitution prohibits state government from incurring a “real deficit,” or to incur expenditures which exceed its fiscal resources, revenues plus appropriate augmentations from the General Fund Reserve, the state must, if its fiscal situation beginning July 1981 is as calculated, exercise one or a combination of three possible actions:

Increase state taxes—a highly unlikely course of action during this period of “taxpayer revolt,” especially in view of the fact that a two-thirds vote is required and the increase must be in the personal income and sales taxes or the tax on corporations, banks, and insurance companies.
Allow the deflator mechanism specified in AB 8 of the 1979 Session to operate, which would reduce state payments to schools and other local governments by the full amount of the deficit.
Implement an appropriate reduction in state expenditures, including allocations to the schools and local governments.

None of the options will be easy to make or properly understood by the public unless the state's fiscal condition is more clearly explained to the citizenry. Without an understanding of the present fiscal trend resulting from the state's “bail-out” of local government and the substantive loss of revenue to the state because of the action taken to “index” the Personal Income Tax, the “man in the street” will react to the fiscal problems indicated above in a negative manner. That is what we do not need at a time when positive thought and constructive action are required if the current fiscal problems of the state are to be addressed in a responsible manner.

Part II

The Jarvis II Initiative: Its Fiscal Implications for State and Local Government

On January 10th, the Governor introduced the State Budget for fiscal year 1980-81. After it has been evaluated by the Legislative Analyst's Office, the Legislature's two fiscal committees will hold lengthy Budget hearings, beginning in the latter part of February and continuing through May, for the purpose of determining the magnitude and composition of the Budget, given the state's revenue expectations and the need for services of government and education, both state and local.

Under the provisions of the California Constitution, the Legislature is required to place the Budget on the Governor's desk for his signature no later than June 15th. For the past two years, the Legislature has not met that deadline because of the problems which have confronted the state as a consequence of court decisions and Congressional action with respect to abortion and public. approval of Proposition #13; nevertheless, at a time very near the first of July, the beginning of the fiscal year, 1980-81, the Legislature will comply with the Constitution and present the Governor with a Budget Bill for his signature.

On June 3, 1980, however, the date of the June Primary Election, the voters will act upon the Jarvis II “Income Tax Initiative”, and if they approve it by a simple majority, its provisions will have an immediate impact on the 1980-81 Budget.

An appropriate question is: What is Jarvis II? Jarvis II is a constitutional amendment initiative sponsored by Howard Jarvis and supported by those who are involved in what is known as the “Spirit of 13.” It is drafted to accomplish three objectives: (1) fully index the state's personal income tax; (2) totally repeal the business inventory tax; and (3) reduce California personal income tax rates by 50%. Legislation enacted in 1979 has already totally repealed the business inventory tax and fully indexed the income tax for a two-year period. These changes are now California law. The Initiative would, therefore, make these two changes a mandate of the Constitution, rather than part of statutory law, and, in doing so, terminate the current two-year sunset of full indexing of the personal income tax.

The main feature of the Initiative is the third provision, which, through an amendment to the Constitution, would require a 50% reduction in the personal income tax rates. This, of course, constitutes a very serious change in the state's revenue base. An analysis of the fiscal implications of the Initiative, as stated by Attorney General George Deukmejian in a letter to Secretary of State March Fong Eu, indicates that approval of the Initiative by the voters would deprive the state of $5.1 billion of revenue in the fiscal year 1980 and approximately $4.2 billion in 1981-82. A later estimate by the Legislative Analyst, William Hamm, establishes the potential loss of revenue for fiscal year 1980-81 at $4.9 billion and $4.4 billion in 1981-82. The Analyst's estimate includes the impact from full indexing of the Personal Income Tax which, through statutory change, will take effect in Calendar Year 1980. This feature accounts for part of the disparity in the revenue estimate, since the effect of the full indexing legislation is to lower the state's revenue from the Personal Income Tax and reduce, therefore, the potential tax loss from Jarvis II.²

The loss of state revenues resulting from Jarvis II will impact upon the state and local government immediately, since it will drastically reduce the state's ability to finance the State Budget, beginning July 1 for the next fiscal year, 1980-81. The Legislature will, therefore, within four weeks have to reconsider the Budget and make the difficult decisions necessary to reduce the level of Budget expenditures and submit a balanced Budget, one which does not exceed the level of revenues projected for the year.

An examination of Charts II and III indicates the magnitude of the problem. Chart II compares the growth of the total income of the state, including current revenues and carryover reserves, and total state expenditures. The data are predicated upon estimates of existing revenue and expenditure trends and clearly indicate that expenditures are growing faster than total income, primarily because of the exhaustion of the state's carry-over reserve and the loss of revenues in excess of a billion dollars annually because of the indexing of the Personal Income Tax. At some time during the 1981-82 fiscal year, the level of General Fund expenditures will exceed available revenues, and, at that point, either taxes will have to be increased or expenditures reduced if a balanced Budget is to be achieved.

Chart III embodies the same expenditure figures as used in Chart II but it reflects a reduction in state revenues of $4.9 billion in 1980-81 and $4.4 billion in 1981-82 in order to portray the impact upon the state's fiscal situation of voter approval of Jarvis II. This chart dramatically indicates the immediate Budget implications from such action by the voters. In 1980-81, there would be a potential gap of $4.5 billion between total expenditures ($20.9 billion) and revenues ($16.4 billion) , and since, as previously observed, the State Constitution prohibits the state from operating with a deficit, state expenditures must be drastically reduced to eliminate this gap. This is clearly the only reasonable course of action that can be anticipated to be implemented since there is little or no possibility that a tax increase of an appropriate magnitude could immediately be voted into effect as a means of balancing the Budget, given the present attitude of the public toward government and government taxes.

An Examination of Budget Totals

A breakdown of the State Budget into its components is interesting and, I am sure, most surprising to the average citizen. It is an analysis which is made in order to portray to the public the magnitude of the revenue deficiency which will confront the state and, therefore, the schools and local government if Jarvis II is given voter approval. It also indicates where possible Budget reductions might be made and which spending programs, therefore, could be affected.

Total spending, from all state funds, will be about $22 billion during the current fiscal year and approximately 85% of these expenditures will be financed from the state's General Fund. Special Funds, primarily those relating to highways and .motor vehicles, finance about 14% of total expenditures, and bond funds account for the remaining 1%. These figures are contained in Table 1.

The personal income tax reduction which will result from Jarvis II will affect only General Fund revenue, and since, under the State Constitution, most Special Funds can only be spent on certain functions, such as highways, these revenues may not be used to offset a reduction in income taxes. As a result, the impact of Jarvis II will fall dramatically upon the General Fund. The remaining portion of this discussion will examine which major expenditure programs are supported by the General Fund and at which level of government the actual expenditures are made.

When the typical voter reads about the billions of dollars in the State Budget, he or she visualizes money spent on the Governor's Office, the Legislature, tax collection agencies, the University and State Colleges System, prisons, mental hospitals, and a few other categories. All of these, of course, are traditional state expenditures with which the public is familiar, but in total amount they account for only about one-fifth of the total State Budget. The public does not realize that approximately four-fifths of the State Budget is state money which is spent at the local governmental level to support such programs as education, health and welfare services, and property tax relief. In effect, the state uses its superior tax collection abilities to finance programs which are administered locally.

Table 2 shows that during the current Fiscal Year (1979-80) spending on traditional “state services” will be about $4 billion, while state payments to local governments and property tax relief will total $14.7 billion, of which $4.8 billion (not identified in the Table) is being allocated to government, including the schools, to replace revenues deprived them by Proposition #13. These data indicate that if all state employees whose services were financed from the General Fund were fired, and the universities, state colleges, prisons, mental hospitals, etc., were closed, the expenditure savings (about $4 billion) would not be sufficient to offset the revenue loss from Jarvis II.

Education, both higher and lower, accounts for over half of the total State Budget. During the current year, the state will spend about $2.8 billion on higher education, $6.9 billion on K-12, for a total of $9.7 billion. This is indicated in Table 2, which also indicates that the next largest expenditure category is health and welfare. The combined or total costs of those programs is $5.9 billion, or about 32% of the State Budget.

Property tax relief is the third largest expenditure category in the Budget, and it adds up to a cost of slightly over $1 billion, and the legislative, judicial and executive expenditures account for less than 2% of the Budget.

Chart IV summarizes these major categories of General Fund expenditures and, also, shows the relative magnitudes of Special and Bond Fund expenditures.

A slightly different breakdown of the State Budget is reflected in Chart V. It delineates more clearly the relation of the “bail-out” expenditure to the other components of the Budget. The statistical data have been represented as percentages of the total Budget and are very general, and were developed only for the purpose of providing a slightly different representation of the allocation of the state's revenues. Of particular importance is the fact that of the 25% of the total General Fund allocation to “bail out” local government, three-fourths was distributed to the schools, K-14; one-fourth to other agencies of local government, which, by virtue of the enactment of AB 8, are now almost fully financed by the local property tax and are almost fiscally independent of the state. The major exceptions are the large allocations to county governments for health and welfare services, which are traditional state allocations and are unrelated to Proposition #13 and AB 8. The response to Proposition #13 did, however, expand the state's fiscal support for programs in the health and welfare areas which are administered at the local level and were previously financed largely from property tax revenues. This increase in state funding was provided in the local government portion of the AB 8 allocation.

Part III

Alternative Approaches for Response to Jarvis II

The facts indicate that California's General Fund Revenues in 1980-81 will be reduced by approximately 25% if Jarvis II is approved by the voters on June 3, 1980. Obviously, a revenue loss of this magnitude, $4.9 billion, will impose a serious mandate upon the Legislature and the administration drastically to reduce government expenditures. Unfortunately, this will occur at a time when the State Legislature has completed its hearings on the Budget Bill and is prepared to present to the Governor a very austere Budget for 1980-81, which will reflect only a modest increase in the state's expenditures over those of 1979-80. The necessity for an austere 1980-81 Budget is the fact that at sometime during Fiscal Year 1981-82 the state will almost certainly be confronted with a deficit. Two significant factors will account for this probability. They are (1) the inadequacy of the state's General Revenues, and (2) the rapid decline in the state's General Fund Reserve.

The fact that the state will be confronted with such a serious fiscal situation, apart from voter approval of Jarvis II, is not unusual in recent California history. For example, in 1959-60 the state was confronted with a deficit situation and Governor Brown, Sr., in order to avert its occurrence approved the enactment of a tax increase. Governor Reagan, during his first year in office, was also threatened with the possibility of a major General Fund deficit and was compelled to sign a $1 billion tax increase in 1967. His administration was confronted with another revenue deficiency in 1971 and responded through the enactment of personal income tax withholding with a resultant revenue increase which was adequate to eliminate deficit.

There is no question that the Legislature and the administration will be able to address the fiscal situation which confronts the state. But implementation of the appropriate fiscal action will mean that Fiscal Year 1980-81 will not be a year in which costly new programs can be undertaken or existing programs dramatically expanded, and that is the fact of reality which we in government must recognize. Hopefully, in moving toward a balanced Budget, it will not be necessary significantly to curtail or reduce the quality of state services. But if Jarvis II gains voter approval, the magnitude of the revenue loss will be so substantive that an unprecedented and dramatic reduction in the State Budget will have to be achieved immediately. Several courses of action will be available for the Legislature to pursue. None, however, is encouraging. They are:

Activate the AB 8 deflator mechanism;
Reduce the State Budget 25% across-the-board;
Reduce the AB 8 appropriation by 50% and all other Budget expenditures by an appropriate percentage.

Option 1. Activate the AB 8 deflator

When the Legislature passed the local fiscal relief bill (AB 8) in 1979, it incorporated a mechanism to protect the state's General Fund against the possibility of significant and uncontrollable losses in revenue. This mechanism is called the AB 8 deflator. On June 10, 1980, the newly created Commission on State Finance must under the provisions of law estimate revenues for the 1980-81 fiscal year, and, also, determine the magnitude of the June 30, 1980, General Fund Surplus. If these two amounts, in total, fall short of $20.6 billion by at least $100 million, state fiscal assistance to local school districts and local assistance payments to other local governments will be reduced fully to offset the loss, unless the Legislature through enactment of a Concurrent Resolution prohibits such action. One-half of the reduction in the “bail-out” appropriation would be made in apportionments to school districts, and the other half would be made to the state's subvention payments to local governments for the homeowners' exemption, the business inventory exemption, open space contracts, cigarette taxes and motor vehicle license fees. These reductions can only be made, however, to the extent there are sufficient funds in the specified categories to absorb such reductions.

Very relevant to the entire issue of “bail-out,” including the deflator mechanism, is the fact that Jarvis II will be voted on one week before the Commission must make its findings for the 1980-81 fiscal year. It is admitted by all of those involved in the development of AB 8 that the deflator mechanism was never designed to handle a revenue shortfall of the magnitude that would result from Jarvis II. The Legislative Analyst has informed me that there are not sufficient funds in the specified categories to absorb a $4.9 billion loss in income tax revenues during the 1980-81 fiscal year. Implementation of the deflator mechanism is, therefore, not an option which would be utilized as a response to Jarvis II. It was not designed to address Budget problems of the state of such a magnitude as those which might prevail.

Option 2. 25% Across-the-Board Reduction in the State Budget

If a proportionate, or 25%, reduction were applied across-the-board, the impact would be quite dramatic. While we do not have final estimates at this time on total 1980-81 spending, we can use the data from Table 2 to illustrate what the impact would have been during the current fiscal year.

These data show that the following reductions would have to be made in major program areas:

Millions (rounded)

1. Higher Education, $ -700
2. K-12 Education, -1,700
3. Health & Welfare, -1,500
4. Property Tax Relief, -250
5. All Others, -500

Total: $ -4,650

Under this approach, all major program areas would share proportionately in the Budget reductions. Such cuts, however, could not be made in each Budget category. For example, it would be illegal to reduce the $198 million (Table 2) earmarked for debt repayment. Also, many of the programs funded in the State Budget are mandated by state law or the Constitution. The state tax relief payments to local government, for example, to offset the revenue loss resulting from the homeowners' exemption are mandated in the Constitution and the payments to local government to reimburse them for revenue loss resulting from the repeal of the business inventory tax are specified in statutory law. In order to withhold these funds from local. government a constitutional amendment and a change in statutory law would be required. There are many other statutory requirements with respect to the funding of programs, and in these instances, also, new legislation would be needed before the funding reductions could be achieved. Other programs, especially in the health and welfare areas, are integrated with federal law and some of them, as a consequence, may not be reduced without incurring substantial losses in federal funds. When the effect of the constitutional and statutory mandates are taken into consideration, it becomes obvious that a 25% across-the-board reduction in expenditures could not be responsibly implemented and, therefore, discretionary decisions would have to be made in which some programs would experience a disproportionately higher expenditure reduction in order to compensate for the state's inability to achieve reductions in other programmatic areas of the Budget.

When Governor Reagan came into office in January of 1967, he attempted to make a 10% across-the-board reduction in most of the state's so-called controllable expenditures, but after examining the host of problems associated with such an approach to fiscal. responsibility, the Governor realized that such a course of action was not feasible and the concept was abandoned. The problem, of course, would be grossly more complex if a 25%, not a 10%, across-the-board cut were attempted. Furthermore, this approach has the weakness of not achieving expenditure reductions which relate to the total funding sources for particular programs. As a consequence, a program which is entirely funded by the state would be reduced by 25%; whereas, another one which is partially supported from local or federal funds would have a smaller total reduction. An adequate judgment with respect to the effect on the quality of government services would not be made and program results would be confusing and totally irrational.

A responsible analysis of the ramifications and complexities of implementing the 25% option indicate, frankly, that it is not feasible.

Option 3. Reduce AB 8 Appropriation by 50% and Reduce All Other Budget Expenditures by an Appropriate Percentage

In 1980-81, the AB 8 appropriation will be $5.3 billion, reflecting about an 8-1/2% increase over this year. If this appropriation were cut in half, the state would save $2.65 billion, and the remaining portion of the State Budget would have to be reduced by $2.25 billion to cover the Jarvis II revenue loss. The Governor's 1980-81 Budget message proposes total General Fund spending of $20.7 billion, and if the AB 8 appropriation were deducted, the funding level of the Budget would be $15.4 billion. If a $2.25 billion reduction were made to this amount, it would be equivalent to a lowering of the $15.4 billion to $13.5 billion, or 15% across-the-board.

Under this option, expenditure programs for local education, which amount to 74% of the AB 8 allocation and are also significantly funded in the regular Budget, would be very adversely affected, since they would be victims of what I describe as a “double whammy.” There are also several programs in health and welfare which would experience the same result. They would bear heavier reductions than programs which are funded only in the regular Budget. The effect on local education, for example, would be a reduction in its AB 8 funds by $1.5 billion and its regular Budget appropriation by an additional $0.5 billion, for a total reduction of $2.0 billion, which is equivalent to a cut of 28% of total state funding. By contrast, the higher education programs, which are funded exclusively in the State Budget, would experience only the 15% reduction, or an appropriation loss of $460 million. Health and welfare expenditures would be reduced by $0.9 billion from the AB 8 appropriation, and $0.75 billion from the regular Budget, for a total reduction of 24%. Cities and special districts would lose $130 million and $115 million, respectively, from their AB 8 appropriations.

This option, or some variation thereof, would put local governments, particularly the schools, K-14, and health and welfare, in a serious financial squeeze, and would be very discriminatory in its treatment of different programs. It has, therefore, very dubious viability.

Needless to say, response to Jarvis II is not going to be easy or simple to accomplish, either in the short term or the long term. Unfortunately, the “insurmountable opportunity,” to use Pogo's descriptive terminology, which will confront the Legislature beginning June 3 must be responded to within three to four weeks. The Legislature has a constitutional mandate to place the Budget on the Governor's desk on June 15; the Governor has a mandate to sign it before July 1. I guarantee that the impossible will not be met.

Part IV

Analysis of the Effect of Oil Deregulation on California State Revenues

There is likely to be a substantive “windfall” revenue gain to the state as a consequence of the decontrol of the price of domestic oil, but there is some disagreement among the experts with respect to the amount of revenue that California will derive. Many uncertainties exist.

The enhancement of revenues to the state will consist of two elements: (1) an increase in the income derived from state-owned tideland oil, currently estimated to reach $500 million in 1981-82, or about $390 million greater than 1978-79 actual revenues, and to continue a gradually declining level during the decade of the eighties; and (2) an increase in state revenues generated from corporate profit taxes paid by the petroleum industry in California.

The State Lands Commission estimates that, beginning in 1979-80, the accumulated or total revenue increase to the state will be approximately $6 billion over the next decade. Adjusted for inflation, the total amount would increase significantly, perhaps even to a $10 to $12 billion level. Another estimate, one made by the United States Treasury, I understand, is that the ten-year accumulated revenue increase to California will be approximately $22 billion. The estimate of the State Lands Commission assumes, because of deregulation, an immediate oil price increase, an increase in new oil discovery, and an expansion in the level of recovery from existing oil fields. Since these are variables which will be modified as a consequence of many unknown factors and must be recognized as being subject to change, the estimated revenue increase must be regarded as somewhat fragile. The larger projection by the United States Treasury is predicated upon the assumption of an increase in the price of oil to a price of $75 per barrel. Such a large increase in the price of oil would have far-reaching repercussions upon the rate of inflation and the national economy, and, because of the effect of these and other economic variables, the reliability of such a ten-year forecast would be subject to serious question as to its validity. In fact, several fiscal experts whom I have contacted contend that the State Lands Commission's estimate of an aggregate revenue increase is more responsible and they have expressed serious reservations about the credibility of the United States Treasury aggregate figure.

The increase in state revenues resulting from price decontrol, obviously, could be utilized to address the state's fiscal deficit, but, considering the fact that the current revenue deficiency is approximately $1 billion annually, the revenue windfall, if so utilized, would address only a portion of the state's current deficit. Under no circumstances is it responsible to contend, therefore, that the added revenues will compensate for the unusual tax revenue loss which will result from implementation of Jarvis II in the next fiscal year if it is approved by the voters. For the Fiscal Year 1980-81, that revenue loss is estimated to be $4.9 billion. It will decline to $4.4 billion in 1981-82 and continue thereafter on an ongoing basis. Interestingly, the aggregate revenue loss predicted to result from Jarvis II over a ten-year period, beginning in 1980-81, will be a total of $45 billion, and that aggregate figure does not reflect an annual increase over time which will result from expansion of the state's population, the impact of inflation, or growth in the state's economy—all of which were factored into the estimates of the potential revenue increase for the next decade, beginning in 1982, as a consequence of domestic oil price decontrol. If a 10% increase in the Personal Income Tax were factored into the ten-year projection of the state's revenue loss from Jarvis II in order to adjust for the effect of these economic variables, the ten-year total revenue loss to the state will be $62 billion, and if a 13% annual increase were used in the calculation, the total revenue loss will attain a level of $70 billion. In any event, the projected increase in oil revenues, even when calculated at the aggregate $22 billion figure in order to reflect a potential increase in the price of oil from the current $13 price to that of $75 a barrel, will fall far short of replacing the state's revenue loss to result from Jarvis II because of its 50% reduction in the state's Personal Income Tax revenues. Any argument to the effect that Jarvis II will not adversely affect the state's fiscal condition because of the magnitude of replacement revenues to be derived from “decontrol” of domestic oil prices can only be regarded as irresponsible propaganda because it will constitute a distortion of the fiscal situation with which the state must cope immediately and for an unknown time in the future if the voters approve the Jarvis Constitutional Amendment Initiative.

Part V

SENATOR ALBERT S. RODDA
5052 State Capitol
December 18, 1979

Article in Response to Request from Capitol News Service

On June 6, 1978, the voters in the State of California approved Proposition #13 and voted themselves a substantial. amount of property tax relief. The total loss of money to local government which resulted from that action was $6.9 billion. Subsequently, within a three-week period, the Legislature, utilizing its surplus reserves and state funds already being allocated for property tax relief, provided financial support to local government in the magnitude of $4.4 billion. This action enabled local government and the schools to survive during the first year of the implementation of Proposition #13.

In the 1979 session the issue was addressed again by the Legislature and a solution—which was looked upon as permanent to Proposition #13—was enacted into law in the form of AB 8, Leroy Greene. It increased the state's allocation to local government from approximately $4.4 billion to $4.8 billion and provided for a modest cost-of-living increase each year. Estimated cost in 1980-81 will be about $5.3 billion.

The legislation also contained what is known as a deflator mechanism to implement a reduction in the allocation for 1980-81 in the event that the state anticipates on June 10, 1980, that its revenues and carry-over surplus will be $100 million or more below a critical level of $20.6 billion.

The legislation also transferred a significant portion of property tax revenues to cities, counties, and special districts and virtually liberated them from financial dependence upon the state. The property tax revenues so allocated to local government constituted a transfer of almost all of the property tax revenues normally utilized to finance the schools and that revenue loss to the schools was compensated for through an increase in the state's allocation for education in the “bail-out” legislation; so the schools became very dependent fiscally upon the state, and local agencies such as cities and special districts became more independent of the state. Despite this constructive action by the state, there are problems which remain as a result of Proposition #13. It introduced a grossly inequitable provision into the California Constitution with respect to the assessment of property and, as a consequence, recent and new home buyers will pay a substantially higher property tax than will homeowners who occupied their homes at the time Proposition #13 was approved and have experienced property tax increase at the rate of only 2% per year since that time. As inflation continues, these disparities will become greatly aggravated over time and considerable public discontent will emerge. Ultimately, this issue will have to be addressed through a constitutional amendment. Such a change cannot be made now because it would be interpreted as an “end-run” around Proposition #13.

An additional problem is the fact that local agencies of government, including the schools, because of Proposition #13, will have a very limited ability to finance construction of new government and school structures. Reliance in the future for such funding will, it appears, shift to the state, but, as of this time, the problem is not fully appreciated or understood as to its magnitude, and significant fiscal and policy issues, therefore, remain unresolved.

Furthermore, Proposition #13 did not adequately address the issue of the shift of the local property tax from rental, commercial, and industrial to residential property —a shift which has been dramatic in the last decade and was one of the factors which contributed to dissatisfaction with the property tax and voter approval of Proposition #13. The latest data indicates that the trend has been reduced, but that it has not been terminated. That issue, also, may have to be addressed in the future.

The voters approved Proposition #4 in November of 1979. Known as the Gann Initiative, it has placed a limit on increases in spending of state and local governments which is equal to the CPI, plus population growth.³ A number of unresolved issues relate to the meaning of several important provisions of that amendment and those issues will have to be addressed in the current session of the Legislature. The impact of the Gann Amendment will not be as substantive as was originally thought because of the high rate of inflation, but there are gross differences in the degree to which many local agencies of government have received or will receive tax revenues in the future, and because of these disparities there will be some segments of government, especially school districts, which will be adversely affected by Proposition #4.

On June 3, 1980, the day of the next Primary Election, the voters will, it now appears, have to consider whether or not to approve the new Howard Jarvis Initiative, generally referred to as Jarvis II. It will reduce personal income tax rates by 50%. In addition, it will fully index the personal income tax and provide for the complete elimination of the business inventory tax. Both of the latter changes have been enacted into law, so the only change that the amendment will achieve is a substantial reduction in the state's Personal Income Tax revenues.⁴ But that will constitute a most substantive change in state government, since its impact on state revenues will be dramatic. It will reduce the state's income for the next Fiscal Year, 1980-81, by $4.9 billion. That loss will come at a time when the Legislature will have under consideration for fiscal enactment the new State Budget, one which incidentally must be very austere, since currently the expenditures of the state exceed revenues and a deficit is only being avoided through a draw down from the state's accumulative surplus, or carry-over surplus of previous years. The fiscal situation, furthermore, is such that unless the deficit currently being experienced is corrected by the end of 1980-81, the accumulative reserve will be exhausted and the state will enter into Fiscal Year 1981-82 with the potential for a significant deficit. The Budget for that year will have to be balanced, which will require either a reduction in expenditures or an increase in revenues through a tax increase, which is very unlikely. The voters must be made aware of these facts and appreciate that a loss of state revenues of $4.9 billion will be traumatic and adverse to state and local government. It cannot be compensated for through the use accumulated surplus because the state's accumulated surplus will become non-existent at the end of next year. So drastic Budget reductions must be implemented within a very short period of time—three to four weeks.

The revenue loss from Jarvis II corresponds to about 25% of the state's Budget and if that percentage were applied across-the-board in reductions in expenditures at the state and local government level, the effect on the quality of government services would be very adverse and, also, uneven because of constitutional and statutory limitation on the state's budget flexibility. In effect, the State Budget would be reduced by 25%, the schools apportionment would be reduced by 25%, and health and welfare allocations to local government agencies, counties particularly, for assistance to the needy will be reduced by 25%. These reductions in the Budget would have to be accomplished within a four-week period so that the Budget could be signed into law by the first of July, or soon thereafter. It will be an incredibly difficult task for the Legislature and will be impossible to accomplish in a way which will reflect careful and constructive implementation of priorities—an identification or differentiation between the “fat” and “sinew.” But the action will have to take place and the “meat cleaver” approach w111 take precedence over that of the “scalpel.”

One fact which is interesting is that Proposition #13 and Jarvis II will, together, provide an ongoing tax cut, state and local, of about $11.3 billion and, of that amount, the net loss to local government in 1978-79 was a short-fall of $2.0 billion; and if “bail-out” is abandoned and the full impact of Proposition #13 is imposed upon local government, the total short-fall will equal about $7 billion. That is unlikely to occur, in my opinion, and the $4.9 billion state revenue loss will probably be shared at both the local and state levels, and education and state and local government services will all have to be curtailed.

Incidentally, the Federal government increased its Federal Income Tax revenues from California when Proposition #13 was approved by $1.9 billion, because taxpayers experienced a decline in their tax deductions by the amount of their Proposition #13 tax benefit. If Jarvis II is approved, the Federal Personal Income Tax will be increased, for the same reason, by up to $1.5 billion. So Washington will, as a consequence of the two initiatives, experience a revenue increase of up to $3.4 billion 1 from California taxpayers. The net tax reduction to California taxpayers will not be $11.3 billion, but $7.9 billion, a state and local tax reduction of $11.3 billion and a Federal tax increase of $3.4 billion.

Part VI

Basis for Estimate of First-Year Revenue Loss Under Jarvis II

The language of the constitutional initiative provides that it will become effective immediately upon approval by the voters. Critical to this fact is that under existing law any modification which occurs in the state's personal income tax rates before the end of a Calendar Year will apply to taxable income for the whole year. As a consequence, the income tax reduction initiative, if approved, is being interpreted as having the effect of bringing about a reduction in the state's personal income tax rates for the entire 1980 income year, even though five months of the year will have elapsed before the initiative is voted upon by the voters.

Of significance to the fiscal situation for the Fiscal Year 1980-81 is that tax experts generally acknowledge that approval of Jarvis II would occur too late in Fiscal Year 1979-80 to affect the amount of revenues received by the state during that year; as a consequence, the entire fiscal impact of the revenue reduction in the tax year 1980 will occur after July 1, 1980, and impact only on Fiscal Year 1980- 81. The loss will not, therefore, be one-half of one-half of the normal personal income tax revenues for six months of Fiscal Year 1980-81 but, rather, one-half of the personal income tax revenues which, absent Jarvis II approval, would have been received by the state. At the time this paper was being prepared, it was unclear precisely as to how the issue of income tax withholding would be addressed, but it appeared that there were three options or courses of action which might be taken.

Current law requires that withholding rates be changed in the tax or calendar year following the tax year in which a change in the tax rate is made. If this statute is observed, no reduction in withholding rates would occur during the months of June through December, 1980. At the beginning of the 1981 tax year when taxpayers file their income tax returns for the 1980 income year (which coincides with the calendar year), they would qualify, as a result of the application of the rate reduction imposed by Jarvis II, for a very substantial tax refund. As an alternative procedure, the state withholding rates could be suspended or reduced for the months of June through December, 1980, on the grounds that Jarvis II becomes effective immediately and, since it is a constitutional amendment, would be “self-implementing” and would, thus, supersede the existing statute. The Legislature could, also, through the enactment of urgency legislation, take action to amend or repeal the statute mentioned above and, thus, authorize an immediate reduction in the withholding rate. In either event, whether the payment of unusually large refunds in 1981 or a significant reduction in income to the state in 1980 after July 1, or a combination of both, were to take place, the reduction in revenue would amount to an estimated total of $3.5 billion for the 1980 income year.

The $3.5 billion revenue loss for the 1980 Calendar Year in state tax collections, however, does not constitute the full revenue loss to the state. During the first half of the 1981 Calendar Year, an additional $1.4 billion decline in personal income tax payments will occur because of the permanent, or ongoing, 50% tax rate reduction. The combined impact of Jarvis II during the 1980-81 fiscal year, therefore, is estimated to be state revenue loss of $4.9 billion.

In subsequent fiscal years, the revenue effects of Jarvis II obviously will apply to each Calendar Year, and the Legislative Analyst has estimated that loss in the 1981-82 fiscal year to be approximately $4.4 billion.

Another factor of significance is that because the income tax initiative does not change the current deductions for charitable donations and business expenses, or repeal or reduce the personal income tax credit, the actual revenue loss to the state is not 50%, but is estimated at 53.5%. This, of course, inflates the revenue loss to a higher level than that which a strict 50% reduction in personal income tax revenues could produce. This percentage, 53.5% instead of 50%, has been used in the calculation of the revenue loss. I mention it here merely to indicate that a simple 50% reduction in the personal income tax rates actually produces about a 53.5% reduction in the revenues which the state otherwise would receive.

¹Chart #1 illustrates the historic growth and decline pattern of the two concepts: Year-End Surplus (General Fund Reserve) and Annual Fiscal Balance (Surplus-Deficit). It also illustrates the future trend for two fiscal years based upon projected revenue and expenditure levels. General Fund Reserve on June 30, 1980, does not include $290 million in Federal Revenue Sharing Fund.

²Partial indexing was enacted in 1978 for implementation in 1979. Full indexing was enacted in 1979 for implementation in 1980, subject to a two-year sunset provision. Indexing the Personal Income Tax, incidentally, will result in an annual state revenue loss in the amount of $1.2 billion in 1980-81 and that amount of lost revenue will increase annually. It has contributed significantly to the fiscal problem that will confront the state in fiscal year 1981-82, when the General Fund Reserve will be exhausted and the state's expenditures will exceed projected state revenues.

³Under certain conditions, the control mechanism would become the rate of increase in Personal Income plus population growth. School districts experiencing declining enrollment and higher expenditure levels will be the ones most likely to experience a serious limit on their authorized expenditures and their educational programs could be adversely affected as a consequence. The Legislature will explore the implications of these aspects of the Gann Amendment and will attempt, where possible, to address its deficiencies in the coming session through the enactment of clarifying legislation.

⁴The Initiative will, of course, place these changes in the state's tax structure in the Constitution and, also, eliminate the two-year sunset provision which relates to the full indexing of the personal income tax as provided in the Bergeson legislation.

Brief Analysis of the 1998-99 State Budget (1998)

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The Rodda Project: A structural deficit in California budgeting

Although he was no longer at the center of the debate over state finances after 1980, for many years Sen. Rodda remained a keen observer of the annual budget debate at the State Capitol. These brief comments were originally typed up by the Senator himself, probably on the old IBM PC Portable that had finally replaced his trusty typewriter. Although undated, Rodda's budget analysis is clearly from the latter half of 1998, after the enactment of the budget bill.

The Senator's two hand-drawn graphs did not reproduce well (I have pale photocopies rather than originals) so I recreated them in a graphics package, adding a rather jarring modern twist. The reader will see, however, that the issue of the structural deficit in the California budget—the consistent outpacing of revenues by expenditures—is also modern, as true today as it was a decade ago.

This document appears to be the last of Sen. Rodda's budget analyses, as I have nothing more recent in my collection of the Senator's papers.

—TB

Brief Analysis of the 1998-99 State Budget (1998)

During the years from 1984-85 to 1989-90 California General Fund Expenditures averaged 6.75% of California Personal Income. The fact of reality today is that the 6.75% no longer prevails.

Personal Income is the dollar income received by the residents of the state in the form of wages, salaries, profits, rent, and interest payments. From these incomes state and local taxes and government agency fees are paid and the balance is available to the recipients for their personal use.

After payments are made for rent, food, clothing, health, transportation and similar basic needs, the income remaining, which is defined as Disposable Income, is the income which the recipients may utilize for the purchase of luxury items, or to save and invest. Only individuals experiencing fairly good incomes will enjoy the advantage of receiving Disposable Income—personal income in excess of that required to pay for necessities and government taxes and fees.

General Fund Revenues as estimated by the Department of Finance in the State Budget Presentation for 1998-99 will amount to $60.36 billion, which includes $2.5 billion carried over from the previous budget.

State Personal Income estimates have been revised and the amount has been increased for the year of 1998 from $900 billion to $918 billion. If General Funds as a percentage of Personal Income were to amount to the 6.75% of the years from 1984 through 1989, California General Fund Revenues would amount approximately to $61.95 billion. That is an amount which is about $4.1 billion greater than the current $57.8 billion projected as state revenues for the next fiscal year.

It is clear that state government revenues, despite the favorable economic situation in California for the past five years, are at a level in relation to Personal Income below that of the late eighties. If, as is probable, the state experiences a period of economic recession in the near future, the fiscal situation for the state will become even more unfavorable.

Given this condition, it seems reasonable for the state to preserve the current fiscal situation with respect to its annual General Fund Budget appropriations. The proposal being made by the Governor to initiate a phase in of a reduction in the Motor Vehicle License Fee would reduce General Fund Revenues in the amount of about $2 billion in 1998-99 and would increase to about $3.5 billion in fiscal year 2002. Such a reduction would impair the state's ability to maintain the current level of public services, which has significantly declined during the past decade, as previously noted, despite the favorable economic conditions the state has experienced during the past five years.

A negative aspect of California's fiscal situation is that General Fund Revenues are less elastic than they were prior to 1990. A revenue source is elastic if it increases annually at a more rapid rate than the annual increase in Personal Income. The current situation is one in which General Fund Revenues are tending toward a condition of inelasticity.

Of all of the state's revenues, the most elastic is the Personal Income Tax. Because of voter approval of Proposition #6, however, which indexed the Personal Income Tax. and because of the enactment of legislation to make the California Personal Income Tax conform more fully to the Federal Income Tax, the California Personal Income Tax has lost a significant amount of its elasticity. Furthermore, the repeal of the Inheritance and Gift Tax Law by voter approval of Proposition #7 has further reduced General Fund Revenue elasticity. These conditions have been aggravated by the impact of the recent enactment of tax reduction legislation.

Unfortunately, despite the improvement in the economic situation in California during the past five years, General Fund Revenues continue to increase annually at a percentage which is less than that of the state's Personal Income.

The fiscal facts are that Personal Income increased over the past seven years in an amount of approximately 64%, but state revenues during the same year increased only 34.4%. Obviously, California's tax base no longer experiences its historic level of elasticity, or an increase comparable or greater than the annual increase in the Personal Income.

The enclosed Charts indicate in a graphic way this change in the fiscal situation of the State of California.

The Capitol Restoration Gala (1982)

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The Rodda Project: Restoration of the State Capitol (1982)

The background to Sen. Rodda's remarks

Many states decided to embark on special projects in concert with the national observation in 1976 of the bicentennial anniversary of American independence. California decided to refurbish the classic features of the State Capitol in Sacramento, whose dome is an echo of the U.S. Capitol building in D.C.

The Capitol Restoration Project was a great success, although it took considerably longer than originally planned. At each stage the restoration workers uncovered new and exciting features of the old building, each discovery requiring evaluation and a decision whether it would affect the renovation plans. The State Capitol was returned to service in 1982, at which time a series of events were planned to mark the occasion.

Sen. Rodda was invited to deliver some remarks at the gala celebration held in the restored senate chambers. Although he was no longer in office, he had been involved in making the original plans and had been dean of the senate. Cognizant of the honor being extended to him by his former colleagues' invitation, Albert Rodda prepared a short speech. He was overcome by emotion as he spoke and had difficulty completing his remarks. Rodda apologized for becoming overwrought, but his colleagues thanked him warmly for his efforts and his entire speech is preserved in the following text.

Remarks of Former State Senator Albert S. Rodda at the Capitol Restoration Gala in the Senate Chamber

January 9, 1982

I am honored to have been invited to participate in this unique ceremony. It is an important occasion for the city of Sacramento and for our great state. The Capitol restoration will prove to be a remarkable and constructive contribution to California's history, and I am grateful to the Joint Rules Committee for its initiation and completion of the project. Because of this action, citizens of California and of other states who are interested in the importance and meaning of history may now view the Restored Capitol, the Indian Museum, Sutter's Fort, the Old Governor's Mansion, and the State Railroad Museum when they visit the capital city. These evidences of California's past will provide a remarkable opportunity for them to visualize and appreciate the history of our great state. They are symbols of the state's past and, as such, they are important; all states and nations must preserve and respect those symbolic representations of their growth, development and significance. The symbolic importance of the American Flag, the National Anthem, the Pledge of Allegiance and the holiday celebrations of important historic events are all essential to the education of the people; to the strengthening of their identification with this country's values and historic significance; and their appreciation of the substance and meaning of our remarkable system of government—a heritage of which we must be proud and to which we must have a deep personal commitment. For that reason, I have chosen to speak today more to the substance of the Gala Week Ceremony and less to the symbolism of the grandeur of our beautifully restored capitol. In doing so, I will begin with a quotation from an essay entitled “A Vindication of the Government of New England Churches” by Reverend John Wise, an early 18th-century American writer. In that essay, Chapter II, “The Freedom of Man,” he commented that “... from the Principles of Sociableness it follows as a fundamental Law of Nature, that Man is not so Wedded to his own Interest, but that he can make the Common good the mark of his Aim; And hence he becomes Capacitated to enter into a Civil State by the Law of Nature; for without this property in Nature, namely, Sociableness, which is for Cementing of parts, every government would soon moulder and dissolve.”

Many 18th-century colonial thinkers were significantly influenced by the philosophy expressed by Reverend Wise, and they consistently affirmed their faith in the ability of the citizen to govern himself and the importance, therefore, of introducing government by popular rule into the colonies and of making that concept the basis for the establishment of the new American nation. In this connection an interesting statement by Alexander Hamilton in The Federalist Papers is worth noting. It was apart of his appeal to the public for their approval of the Federal Constitution. He commented as follows:

“Let us now pause and ask ourselves whether ... the proposed Constitution ... has not been satisfactorily vindicated from the aspersions thrown upon it; and whether it has not been shown to be worthy of public approbation and necessary to the public safety and prosperity.... Every man is bound to answer these questions to be himself, according to the best of his conscience and understanding, and to act agreeably to the genuine and sober dictates of his judgment. This is a duty from which nothing can give him a dispensation. 'Tis one that he is called upon, nay, constrained by all the obligations that form the bands of society, to discharge, sincerely and honestly. No partial motive, no particular interest, no pride of opinion will justify to himself, to his country, or to his posterity, an improper election of the part he is to act.”

After Alexander Hamilton wrote these words, the U.S. Constitution was approved and the American federal system of government established. Since its inception and implementation, the powers of the people have been greatly expanded. The right to vote has been broadened to include both sexes, and all restrictions based on race and the ownership of property have been eliminated; slavery has been abolished; free public education has been granted to all citizens, and the civil rights of all citizens have been provided greater protection from the abuse of power by the state. All of these accomplishments reflect the conviction that the average citizen can be trusted to govern himself and that he will be influenced in his decisions by an appropriate respect for the rights of others and by an acceptable code of moral and ethical values.

A word of caution is in order. The acceptance of such a basic assumption about self-government should not be interpreted to mean that one must expect that representative government or government by the people will achieve an utopian social order and the elimination of all social injustice—a clean house swept free of all that is not defined as good. That end can never be the hope for this or any country if it is to remain an “open society” and guarantee the citizens their personal freedoms. One must be realistic about the ability of people to govern themselves through involvement in politics and, thus, determining how the power of the state be exercised.

Politics, by its nature, I must warn you, can only exist in a free and open society—that is politics as we know and experience it. In countries in which forms of totalitarianism exist, whether to the left or to the right, there is no politics. There is the exercise of political power by the army, a dictator, or a political party, but that is not politics—the sharing of political power. So keep that fact in mind when you are disposed to argue, as many citizens do, that our system of government is inadequate, corrupt, controlled by the special interests, inefficient and intrusive into their private lives. The acceptance of that attitude can lead to non-commitment, non-involvement, and even-alienation. It can become the rationale for one to become “otherwise engaged” and to refuse to accept the society. I wish to admonish you, therefore, even though I am a politician and humble about the prospects for the future, that while politics is a grubby business and will always be a grubby business, it is the most important business in the country as it relates to your personal freedom and the exercise of your prerogatives and rights as a citizen.

J.D.B. Miller, a contemporary Australian scholar and author of The Nature of Politics, analyzed the political process very thoughtfully and realistically, and his observations are very relevant to the contemporary political scene and are, therefore, worthy of note. The essence of his thought, simply stated, is that the establishment among rival groups and interests of political order—of agreed upon rules for the game—marks the birth of freedoms and that the compromises, deals, half-measures and bargains, which prompt impatient idealists to regard politicians as the “untouchables” and politics as an unworthy profession, are, in actuality, essential to the negotiating process of politics and remain, as history amply demonstrates, the only tested alternative to government by “outright coercion.”

In the last paragraph of his very scholarly work, Miller made the following significant observation:

“Politics does not carry values with it—on the whole, the values used in politics are those of the society in which it is being practiced, and do not derive directly from political operations—but it (politics) maybe said to constitute a value in itself, because the alternative to politics is compulsory agreement, in which everything that is not forbidden is compulsory. Interests which inveigh against ‘politics’ are often those which wish to make a whole society conform to a pattern which they lay down for it.”

This is my message. Retain one’s commitment to the open or free society. But in doing so, do not look upon the democratic system as utopian, or try to make it so; one should certainly not, because of its obvious flaws and imperfections, allow oneself to become alienated from it and to deny it a personal commitment. To adopt either perspective, is to abandon reason and to reject the lessons of history. One should heed the admonition of Abraham Lincoln in his Second Inaugural Address, when he observed in words having a timeless quality:

“With malice toward none, with charity toward all, with firmness in the right as God gives us to see the right, let us strive on to finish the work we are in, to bind up the nation's wounds and to care for him who shall have borne the battle and for his widow and his orphan, to do all which may achieve and cherish a just and lasting peace among ourselves and with all nations.”

Or, one might recall the words of President John F. Kennedy in his Inaugural Address of 1961, when he observed:

“And so, my fellow Americans: Ask not what your country can do for you—ask what you can do for your country. But knowing that here on earth God's work must truly be our own, with a good conscience our only sure reward, with history the final judge of our deeds, let us go forth and lead the land we love asking his love and blessing.”

Brief history of the tax reform struggle (1978)

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The Rodda Project: Prelude to Proposition 13, April 1978

The background to Sen. Rodda's paper

In 1978 the state of California was enjoying a burgeoning budget surplus. Actually, “enjoying” is the wrong word. Governor Jerry Brown was a tight-fisted Democrat under whom the state budget grew even more slowly than under the administration of his predecessor, Republican Ronald Reagan. The revenues pouring into state coffers were driven by sky-rocketing property taxes. The surplus, therefore, was simply the most visible aspect of a growing crisis, as well as stark evidence that the state's property owners were coughing up a lot more in taxes than the state had immediate use for.

The circumstances were ripe for an opportunist like Howard Jarvis, heretofore a fringe element in California politics. Now he would go mainstream. Jarvis was a southern California apartment complex owner who had unsuccessfully backed previous attempts to slash property taxes by the initiative process. Until 1978, the voters were unwilling to embrace proposals for such drastic cuts. Now it looked like they were ready.

Jarvis clothed his campaign in the guise of a people's rebellion, and there were enough anxious homeowners flocking to his banner to give Jarvis the cover he needed. In reality, however, he remained an anti-government extremist (a forerunner of the notorious Grover Norquist) who wanted to reduce California to a low-tax paradise and libertarian eden. Proposition 13 was designed to richly reward Jarvis and other owners of commercial property with provisions that called for property-value reassessments only upon transfer of title. Given that homes changed hands much more frequently than commercial properties, homeowners would see their property taxes inch upward at rates much greater than those of commercial properties. It strains credulity to imagine that Jarvis and his inner-circle supporters did not anticipate this result, as a consequence of which identical homes on the same block may now pay dramatically different property tax rates. Proposition 13 requires that you stay put to enjoy its fullest protection. (I am personally aware of this, owning a duplex whose halves I purchased 18 years apart. My taxes on the more recently acquired half-plex are 2.4 times those on longer-owned half.)

In 1978 Albert Rodda was chair of the Senate Finance Committee. Aware of the looming crisis and the closing window of opportunity to use the state surplus to achieve some genuine tax relief and reform, he threw himself into a vigorous effort to bring the factions together. The attempt foundered because of irreconcilable differences between two major factions in the Legislature, although in the spring of that year it appeared that a glimmer of hope remained. Sen. Rodda documented some of the details of the struggle over property tax reform in April 1978, hoping to clarify the situation and provide information to those who were working to secure passage of Proposition 8 on the June primary ballot, a measure whose enactment by the voters was necessary in order to implement the provisions of SB 1. The voters, however, turned against the legislative initiative, rejecting Proposition 8 and enacting the infamous Proposition 13. Since then, Californians have enjoyed varying measures of property-tax relief, although it has been at the price of reducing local government to penury and concentrating political power in the state capital.

—TB

Brief History of the Struggle by the Legislature to achieve Tax Relief-Reform in the 1978 Session

April 25, 1978

I believe that it is my responsibility to provide you, as a correspondent and a voter, with information relating to the history of the enactment of legislation to achieve tax relief and reform.

It may not be known to you that in order to resolve the confusion and conflict in the Legislature over the tax relief-reform, I was asked by the Governor and the Senate President pro Tempore, James Mills, to work with Senators Jerry Smith and John Holmdahl to implement a compromise concept referred to as the Democratic “Airport Plan,” so designated since the basic elements were agreed upon by the leadership of both Assembly and the Senate in a meeting held at the San Francisco Airport.

It was my conviction that the two houses of the Legislature should work together in order to reach a consensus and to avoid the most controversial provisions contained in SB 154, the tax relief-reform bill which twice had failed in the Senate in the closing days of the 1977 session of the Legislature.

The controversy which emerged over SB 154 centered upon its inclusion of the “circuit breaker” concept, a means of providing property tax relief on the basis of a formula which utilized two factors—the personal income of the homeowner and the assessed value of the residence. Under the formula, low-income owners of high assessed value homes would receive the greatest tax relief benefit. On September 15th, 1977, the bill failed of passage in the Senate by a 21 aye to 15 no vote, 27 aye votes of the total membership being necessary for enactment. The “circuit breaker” distribution formula incurred opposition because it constituted a means of redistributing income through the property tax. Under its provisions, 33% of the homeowners would have received no tax relief and about 50% would have received $65 or less. A very few would have received as much as $1,500, since their incomes were below $5,000 and their houses were assessed at $80,000 or above.

Ideologically, this proposal was unacceptable to many of the Senators, but there were other controversial provisions in the bill and they related primarily to a number of tax reform elements, specifically heavier taxation of small oil producers and corporate preferential income, heavier taxation of intermediate and long-term capital gains, an increase in the corporate profits tax to 10-1/4%, an increase in the motor vehicle license fee, a change in the property tax lien date for partially completed structures, and restrictions relative to the speculative purchase and sale of residential property.

It was the general consensus among legislators who reflected upon the defeat of SB 154 that a tax bill containing too many controversial features, especially the “circuit breaker,” could not obtain the necessary 2/3rds vote for enactment, a requirement made necessary if a bill in the regular session were to become effective immediately and if the buyout of the business inventory tax were included in the legislation.

It was consistently my opinion, after the failure of the two conference committee reports on SB 154, that the business inventory buyout should be included in the tax relief-reform legislation but that the “circuit breaker” should be eliminated and most controversial. tax reform provisions also excluded. By means of this approach to the problem, I thought that it would be possible to achieve a reasonable compromise and I sought, therefore, to convince the leadership to introduce such a compromise into the original Petris bill, SB 154, by means of the submission of a third conference committee report. to both houses of the Legislature. I opposed, therefore, a special session, which was called by the Governor as a means of expediting enactment of tax relief legislation. A bill enacted in a special session with a simple majority vote may become law within 90 days of the termination of the session. It seemed politically practical, therefore, to utilize the special session as a political strategy to avoid the 2/3rds vote requirement. The majority vote rule did not apply, however, to the business inventory tax buyout since such a change in law, because of constitutional issues, requires a 2/3rds vote even in a special session.

My negative view of the special session on the tax relief- reform was predicated on two factors. I foresaw the introduction of many tax relief bills and the consideration of the two issues, homeowner-renter relief and the business inventory buyout, in separate bills rather than in one.

My predictions were fulfilled and we failed to “bite the bullet,” as it were, and make a responsible decision in a third conference committee on SB 154. And so time was wasted and controversy developed which reduced the ability of the leadership to exercise speed and direction in the development of tax relief legislation so that the achievement of the Legislature could be included in the ballot argument against Proposition No. 13. Once the special session was called, the liberals renewed their demand for a “circuit breaker” approach to tax relief and for the inclusion of tax-reform elements to finance the business inventory buyout. This position was, also, vigorously advocated by the California Tax Reform Association, a citizen's organization engaged in a lobbying effort on behalf of a “share the wealth” or “circuit breaker” approach to property tax reform-relief and dedicated to funding the business inventory buyout with revenues generated from an increase in the corporate profits tax, the tax on capital gains, and the closing of several tax loopholes. That organization consistently opposed the legislation which I developed in cooperation with Senators Smith and Holmdahl and which was originally embodied in the package, SB 6 (1st Ex.) and SB 7 (1st Ex.)—both introduced in the special session.

Enclosed is a press conference release made by this group. It was because of its opposition, I am confident, that the compromise or “Airport Plan” was not approved by the Senate Revenue and Taxation Committee.

After weeks of disagreement and denial of approval of the Rodda-Smith package by the Senate Revenue and Taxation Committee, I undertook to create a coalition to support a homeowner-renter tax relief and business inventory tax buyout bill. Its provisions were introduced into AB 107, Chel, with the author's consent and support, when it was under consideration in the Senate Finance Committee. The Senate coalition of leaders supportive of that action consisted of Senators Dennis Carpenter and William Campbell, both Republicans, and Senators Jerry Smith, John Holmdahl and myself, Democrats. The compromise was designed to enact a tax bill which would provide for homeowner and renter tax relief and for the repeal of the business inventory tax.

After the Chel bill, AB 107, was so amended, the Senate Finance Committee voted the bill to the Floor. Assemblyman Chel, in agreeing to accept the amendments, demonstrated a great deal of courage since he knew that the Assembly Speaker was opposed to that course of action. The Speaker not only opposed that course of action but also opposed the utilization for that purpose of the Lockyer bill, AB 7 (1st Ex.), to provide a buyout of the business inventory tax, which also was in the Senate Finance Committee. Five Democrats and four Republicans voted for the Chel bill, as amended into a comprehensive tax relief-reform bill. Two Democrats voted “no,” one abstained and one Senator, Peter Behr, was not present.

The homeowner-renter provisions of AB 107, as amended, were essentially those in SB 6 (1st Ex.), Rodda, and the business inventory buyout provisions were similar to those in SB 7 (1st Ex.), Smith. The legislation consisted of a buyout of the cost of Medi-Cal, AFDC, and 551 and General Assistance and an increase in the homeowner's exemption from the current $1,750 level to $2,500 and then finally to $3,500. It provided renter relief in the amount of $75, later increased to $87, and improved the senior citizen-totally disabled homeowner and renter relief benefits for those whose income is $13,000 or less. There were also limits placed on local government and state expenditures in the form of revenue limits. The business inventory buyout was to be phased in over four years, and it was to be financed by a graduated increase in the corporate profits tax to 10%. There was no provision for the closing of controversial tax loopholes and no change in the long-term capital gains tax provisions of current law. A portion of the buyout would, as a consequence, have to be derived from the state's ongoing surplus.

The Lockyer bill, AB 7 (1st Ex.), contained a number of controversial provisions as sent to the Senate Finance Committee—a 10-1/4% bank and corporate profits tax, taxation of 75% of intermediate and long-term capital gains, and several loophole-closing elements. In that form I advised the author to develop amendments to make it conform more to the Chel provisions in AB 107. Subsequently, after several weeks of negotiation, the author, Assemblyman Lockyer, amended the bill in a manner which was acceptable to the Senate Finance Committee, and on April 10 the measure was heard in committee and voted to the Senate Floor.

During the time that the tax relief-reform controversy was taking place, Senator Behr achieved some progress in his efforts to enact SB 1, although there was considerable opposition to it in its original form, since it provided for a 20% personal income surtax and a 5% residential housing transfer tax as a means of generating revenues to pay for its very substantial tax relief benefits.

On January 30th, the last day for action on SB 1, it was amended on the Floor and the 20% personal income tax feature was deleted. In its amended form, the homeowner tax reduction was estimated at 50% of the property tax. The bill also provided for a buyout of SSI-SSP, Medi-Cal, and AFDC costs and granted special tax relief benefits for senior citizens, homeowners and renters, and for an across-the-board benefit of $75 for each renter instead of the current $37. The bill contained no provisions for a buyout of the business inventory tax.

Despite these provisions, there developed considerable opposition to SB 1 because of the 5% transfer tax. This feature was finally understood by the members of the Legislature, especially the Assembly, to have considerable controversial implications and after several hearings in the Assembly Revenue and Taxation Committee the transfer tax was modified and became a capital gains tax or a tax on the profit from the sale of property.

It is important to note that several of the major provisions of the Behr legislation, as finally amended on the Floor of the Senate, had been taken from the “Airport Plan” concept and which, as stated above, had been embodied in the bill which I had authored, SB 6 (1st Ex.) and which the liberal Democrats on the Senate Revenue and Taxation Committee had failed to approve after two hearings. The committee had also refused to approve the Smith bill, SB 7 (1st Ex.), to repeal the business inventory tax, apart of the “Airport Plan” concept. But it approved the Lockyer bill, AB 7 (1st Ex.), to accomplish this goal and to fund the repeal, as I indicated above, through an increase in the corporate profit tax to 10-1/4% and the taxation of intermediate and long-term capital gains, and the elimination of a number of tax loopholes—several of which would have adversely affected small oil companies and other businesses.

The committee also approved a special session version of SB 1, Behr, which contained basically the same provisions as SB 6 (1st Ex.), Rodda, but contained the 5% capital gains tax on the sale of owner- occupied homes and provided a 40% tax reduction to homeowners.

Because of the approval by the Senate Finance Committee of AB 107, as amended to provide homeowner-renter relief and the business inventory buyout, the Senate gained the political leverage that it needed in its effort to advance the progress of tax relief legislation. Within a few days the Assembly Speaker reached an agreement with Senator Behr to delete the 5% capital gains tax from SB 1. As a consequence, SB 1 was no longer controversial and there was no prospect that the consensus bill, AB 107, as developed by the Senate Finance Committee, could be enacted. The Speaker was totally opposed to it and promised to “bury” it if it were sent to the Assembly for concurrence in Senate amendments. His support was given to SB 1. As a condition to that support the Speaker indicated that annual budget augmentations and appropriation bills would have to be reduced in amount from $300 million to $170 million. This emphasis on expenditure limitations was predicated upon the estimated cost impact of SB 1 and the state's future revenues and expenditures.

The Behr bill, as amended, has an estimated cost, beginning in 1983-84, which is about $150 million greater than that of AB 107 and that cost increases each year at a significantly more rapid rate than does the estimated cost increase of AB 107. It will be uncertain, therefore, if current fiscal estimates are accurate, whether the state will be confronted with the necessity of a state tax increase if a future deficit is to be avoided.

AB 107, as amended on the Senate Floor to increase the relief to renters from $75 to $87, had an estimated first-year cost of $1.285 billion and a 1981-82 cost of $1.83 billion. In 1983-84, the estimated cost is $1.935 billion and in 1984-85, $1.985 billion.

SB 1, Behr, has an estimated first-year cost of $1.4 billion and a 1981-82 cost of $1.7 billion. In 1983-84, the estimated cost is $2.075 [billion] and in 1984-85, $2.295 [billion].

Essential Provisions of SB 1, Behr

All of the provisions of SB 6 (1st Ex.) and SB 7 (1st Ex.) plus the following:

A 30% across-the-board tax reduction
Homeowner exemption retained at $1,750 level
Renter relief at $75
No buyout of General Assistance
No buyout of business inventory tax
No extension of senior citizen benefit to totally physically disabled

Essential Provisions of Rodda-Smith Legislation

Approximately a 30% average reduction in the property tax on residential homes, although not on a flat percentage basis
Homeowner's exemption, $3,500
Renter's relief, $87
Improvement in senior citizen homeowner and renter relief
Buyout of AFDC, SSI-SSP, and Medi-Cal costs to local government
Extension of senior citizen benefit to surviving unemployed spouses and the totally physically disabled
Buyout of General Assistance costs to local government
Buyout over four years of business inventory tax to be paid for in part by the surplus and an increase in the corporate profits tax to 10%
Responsible limit on local government expenditures

Aspects of SB 1 which were of concern to some of its supporters and its opponents:

Escalation of costs over time because of 30% tax reduction element
The inadequacy of the renter relief benefit and no adjustment for inflation in renter relief payment
Absence of provisions for the extension of senior citizen benefit to the totally disabled
The greater degree of regressivity introduced into the property tax, the exact opposite of the effect desired by those who advocated the “circuit breaker” but opposed SB 6 (1st Ex.) and SB 7 (1st Ex.) and AB 107
The failure to include a buyout of General Assistance, which is a very inequitable program for the provision of assistance to the needy

Aspects of AB 107 which were of concern to some of its supporters and its opponents:

The flat, across-the-board tax relief benefit as provided in the homeowner's exemption increase from the current $1,750 level to $3,500 and the absence of an annual cost-of-living increase in the exemption
The absence of tax reform elements to raise funds necessary to compensate government for the loss of revenue because of the buyout of the business inventory tax
The absence of a “circuit breaker” approach to tax relief

On April 17, the Senate failed to approve AB 7x, Lockyer-Smith, as amended in the Senate Finance Committee. The Republicans attempted to amend the inventory repeal legislation when it was under consideration in the Senate for a final vote by eliminating the language which makes implementation of the legislation contingent upon the defeat of Proposition #13. Other amendments were also offered. They were defeated and a final vote was taken. The measure was denied approval by a vote of 25 to 0. All the Democrats present voted for the measure and the Republicans refused to vote. Reconsideration was granted.

On Thursday, April 20, the bill was presented to the Senate and approved 30-2. It was signed by the Governor on the same day.

I contemplated offering an amendment to make implementation of the business inventory repeal legislation contingent upon implementation of voter approval of Proposition #8, the amendment to provide for a split roll. Because of the controversy which developed on the Floor, I determined not to submit the amendment. There was a serious possibility that such action would jeopardize enactment of the business inventory tax legislation, which had been an integral part of the tax relief-reform legislation.

The major provisions of the Lockyer-Smith bill, AB 7x, are as follows:

Phase-out of the business inventory tax over five years
Phase-in of an increase in the bank and corporate profits tax to 10%
An increase in the minimum tax of 2-1/2% on corporate preferential income to 5%

It is expected that the inventory tax buyout will cost the state a nominal amount from the general fund; its principal costs will be borne by the tax increase imposed upon corporate business.

FOR IMMEDIATE RELEASE

WEDNESDAY, JANUARY 25, 1978

COALITION FOR TAX JUSTICE

LABOR, SENIOR, NEIGHBORHOOD, AND PUBLIC INTEREST ORGANIZATIONS JOIN IN COALITION TO FIGHT FOR PROPERTY TAX RELIEF. DEFEAT OF RODDA-SMITH TOKEN RELIEF APPROACH IS FIRST CAMPAIGN TARGET.

Labor, senior, neighborhood, and public interest organizations today announced formation of a coalition to support property tax relief legislation that would be based on the following principles:

1. Enactment of substantial property tax relief for middle and low income homeowners and renters, targeted on an ability to pay basis. According to John F. Henning, Executive Secretary-Treasurer of the California Labor Federation, AFL-CIO, “the only way overburdened working families will get significant property tax relief is by targeting relief to them on an ability to pay basis.”

2. Local revenue limits, if considered, must be accompanied by a substantial state revenue sharing program with cities, counties, and other local agencies to cover the costs of vital public safety, health, and transportation services which are now dependent on property tax revenues. “Otherwise revenue limits are a prescription for social chaos in our already deteriorating urban centers,” Henning said.

“Working families are against unfair taxes on their homes, not against the essential services those revenues provide,” he concluded.

The coalition's first target is defeat of the Rodda-Smith bill, SB 6X. This bill provides only token relief for middle income homeowners, seniors, renters, and unemployed and disabled workers suffering under the burden of excessive taxes.

SB 6X is slated for hearing today in the Senate Revenue and Taxation committee.

The newly-formed coalition held its first meeting Tuesday at the Woodlake Inn. Principal spokespersons for the coalition include:

John F. Henning, Executive Secretary-Treasurer, California Labor Federation, AFL-CIO;
Tom Hayden, California Campaign for Economic Democracy;
Carl Jones, President, Congress of California Seniors;
Tim Sampson, President, Citizen's Action League;
Dean Tipps, Legislative Advocate, California Tax Reform Association;
Shirley Wechsler, Americans for Democratic Action.
The complete list of participating organizations is attached.

CONTACT:
Patrick Mason, Research Director
California Labor Federation, AFL-CIO
1127 llth Street, Room 610
Sacramento, CA 95814
Telephone 916-444-3676
opeu #29-afl-cio/sc

Organizations Participating in Coalition for Tax Justice

California Labor Federation, AFL-CIO
Citizens Action League
Campaign for Economic Democracy
Congress of California Seniors
California Tax Reform Association
Americans for Democratic Action
American Federation of State, County and Municipal Employees
International Association of Fire Fighters
Service Employees International Union
International Longshoremen's and Warehousemen's Union
California State Building and Construction Trades Council
United Automobile Workers
United Steelworkers of America
Communications Workers of America
State Council of Retail Clerks
Laborers International Union of North America
California Federation of Teachers
United Transportation Union
International Union of Operating Engineers
Friends Committee on Legislation
California Rural Legal Assistance
Western Center on Law and Poverty
City of Oakland
National Association of Retired Federal Employees
Legislative Council for Older Americans

opeu #29-afl-cio/sc

The American Personal Ethic (1977)

2008-10-04T07:45:00.000-07:00

The Rodda Project: Commencement Address, Cosumnes River College, June 1977

The American Personal Ethic: Is there one, or are we abandoning it?

You have completed the work for an Associate of Arts Degree and for this you are to be congratulated. You have taken an important step toward personal fulfillment and you have, also, qualified yourselves to be of greater service to society.

As I was reflecting about what might be appropriate to say to you on this important occasion, I began thumbing through some of my old papers and speeches, looking for a relevant message. As I did so, I encountered an observation which I had written in the middle sixties, when I was reviewing the impact upon American society and culture of the ideas of such writers as Sigmund Freud, Friedrich Nietzsche, Ivan Pavlov, Vilfredo Pareto, and several others. Each of them had, of course, in some way contributed to the acceptance of a conclusion about the nature of human behavior which was contrary to the traditional conviction of American intellectuals that man is a rational being. As a result of their very challenging ideas, the twentieth century has become a period in American history during which the confidence in man's rationalism has been challenged. Many scholars, especially in the fields of psychology and philosophy, have significantly abandoned their faith in man's capacity for rational behavior. They do not confess to have accepted the idea that man is incapable of responding rationally to his environment or to personal challenge, but they contend that other forces, such as subconscious drives or the conditioning influence of the environment—economic and social institutions—can produce behavior which is not significantly directed by the reasoning powers of mankind.

My reflections on this transition in thought left me with the conclusion that American intellectuals had moved from a conviction of almost lofty idealism and hope to one of earthly realism and pessimism. And this, perhaps, is the dilemma of contemporary American society, and it prompted me, at that time, to draw some conclusions about the role of education and the expectations that one might have of it as it influences the lives of students. My reflections were not all-embracing, but they did provide some insight into what I perceived to be essential elements in the education and preparation of youth for constructive participation in an “open society,” which is defined by Karl Popper as that “society in which individuals are confronted with personal decisions.”

I identified two such goals ,and I expressed them as follows: first, to develop the academic, vocational and technical skills, and the cognitive powers of the students so that the unique potential of each individual might be fully realized, and, second, to influence student behavior in a manner which would contribute to the development of a citizen capable of functioning within the rules and forms of the socioeconomic and cultural environment and in a manner which would encourage, through responsible behavior, the highest level of personal fulfillment.

Hopefully, the education which you have received and in which you have participated will enable you to respond to these two very significant responsibilities—one to yourself and the other to the “free and open society” into which you have been born and which Americans, I fear, tend to take so much for granted.

As I have pondered the implications of this observation and the nature of the democratic system of government, I have become somewhat discouraged, for I sense in contemporary America a tendency to emphasize the importance of a quality of human behavior which I regard as inimical to the well-being of the citizen and of society.

My reflections have caused me, therefore, to wonder about (I) the potential of the average person to achieve meaningful fulfillment or a worthy life and (2) the future of representative democratic government in the United States.

Democratic self-government, as conceived and developed in America, has been understood to contain two essential elements: the first is majority rule, or government by the people, and for the people, and the second is the obligation of the individual citizen to govern himself, or to act responsibly and observe in his life an ethical or moral code. In discussing the essential elements of this second principle or aspect of representative democratic government, I have, sometimes referred to them as constituting the “American Personal Ethic.”

I am not only strongly convinced of the historic existence of such an ethic as a fact of American history, but I am convinced that its presence has constituted a vital and constructive force in the history of this nation. Believing so, I have argued that public education must, if it is to fulfill its responsibility to the American people, encourage in each student a recognition of the need for and the importance of a personal ethic. In this role, education must serve to reinforce the character building influence of parents upon their children who obviously are to be the future citizens and rulers of this nation.

I have reasoned that the schools could accomplish this objective, in part at least, by providing meaningful instruction in the ethical and social values of such eminent men as Benjamin Franklin, Thomas Jefferson, Abraham Lincoln and others who have distinguished themselves in government, as well as literature, religion, philosophy, education and science, and who have helped to fashion the institutions of this nation, to direct its history, and to influence the lives of many generations of its citizens.

But this concern, as I have already suggested, does not appear to be one shared by many contemporary writers, thinkers and intellectuals. They are focusing their literary and intellectual powers more dramatically upon two needs: (I) the development in this country of an adequate “social ethic,” for implementation in both domestic and foreign affairs, and (2) the obligation of society to protect the rights of the individual and to provide the fullest opportunity for the citizen to experience a complete expression of personal freedom. The emphasis is upon the obligations of society and the rights and freedom of the citizen. Both of these goals are worthy, and I would not disagree with them per se. It is the degree of emphasis which concerns me. The contemporary intellectual's determination to achieve social justice and personal freedom is so strong that there seems to be lacking, at least in my humble opinion, a genuine concern for, or recognition of the need for society to have an awareness of the importance of the existence among the citizenry of a “personal ethic.” The result is a growing exercise of almost absolute or total freedom among the populace. In many instances the exercise of the new freedom amounts to an expression of personal individualism in a context which is void of value, whether one of religious morality or a humanist ethic. It amounts in many instances to the exercise of an unrestrained expression of “egoism” and is not only destructive of the individual's sense of life's meaning, but it is, also, destructive of the basic personal values so necessary to the preservation of a free, democratic society.

The basic values which, in part, are reflected in what I regard as integral to an “American or Personal Ethic,” are as follows: acceptance of the concept of natural law, emphasis on man's spiritual as well as material interests, and a recognition of the uniqueness of man. In addition, it encompasses the conviction that the objective of the state is to promote an opportunity for the individual to achieve freedom, justice and happiness; that the implementation of the nation's ideals is dependent upon the enlightened self-interest of the individual, and that the citizen is regarded as responsible for his behavior, which must be rational and also reasonable.

It was such convictions that encouraged the founding fathers to struggle for independence from the mother country and then to draft and put into effect a constitutional form of government which contained many innovations—the concept of federalism, separation of church and state, the right of citizens to vote and to hold elective office, a constitutional guarantee of the rights of the citizen, the indirect election of the chief executive, and the separation of powers—all designed to avert the establishment of political tyranny or rule by a privileged class, and the destruction of the rights of the citizen and his personal freedom. No nation in the world at that time contemplated such a remarkable transfer of political power to the people. Perhaps, the faith and expectations that our colonial forebears had in the average man can best be illustrated by quotations from two eminent leaders of the l8th century, one in the area of religious self-government and the other in the area of political self-government.

The first statement was made early in the l8th century by the Reverend John Wise. His faith in the ability of individuals to act responsibly encouraged him to advocate the democratic concept of church governance and his thinking contributed significantly to the acceptance in colonial America of Congregationalism, or government of the church by the members of the church—the laymen.

In an essay entitled “A Vindication of the Government of New England Churches,” Reverend Wise commented:

“God has provided a rule for men in all their actions, obliging each one to the performance of that which is right, not only as to justice, but likewise as to all other moral virtues, the which is nothing but the dictate of right reason founded in the soul of man.”

And, finally, from the principles of sociableness it follows, as a fundamental law of nature, that man is not so wedded to his own interest but that he can make the common good the mark of his aim; and hence he becomes capacitated to enter into a civil state by the law of nature; for without this property in nature, namely, sociableness, which is for cementing of parts, every government would soon moulder and dissolve.

Many 18th-century colonial thinkers were significantly influenced by the philosophy expressed by Reverend Wise, and they consistently affirmed their faith in the ability of the citizen to govern himself and the importance, therefore, of introducing government by popular rule into the colonies and of making that concept the basis for the establishment of the new American nation. In this connection an interesting statement by Alexander Hamilton in The Federalist Papers is worth noting. It was a part of his final appeal to the public for their approval of the Federal Constitution. He commented as follows:

“Let us now pause and ask ourselves whether ... the proposed Constitution ... has been shown to be worthy of public approbation.... Every man is bound to answer these questions to be himself, according to the best of his genuine sober dictates of his judgment. This is a duty from which no other can give him a dispensation. 'Tis one that he is called upon, nay, constrained by all the obligations that form the bands of society, to discharge, sincerely and honestly. No particular interest, no pride of opinion...will justify to himself, to his country, or to his posterity, an improper election of the part he is to act.”

Since Alexander Hamilton wrote these words, the American government has significantly expanded the power of the citizen. The right to vote has been broadened to include both sexes and all restrictions based on the ownership of property or racial background have also been eliminated; slavery has been abolished; free public education has been granted to all citizens, and the civil rights of all citizens have been provided even greater protection from the abuse of power by the state. All of these accomplishments reflect the conviction that the average citizen can be trusted to govern himself and that he will be influenced in his decisions by an appropriate respect for the rights of others and by an acceptable code of moral and ethical values.

I regard myself, I must admit, as a “chastened rationalist”; I doubt the validity of the earlier unsophisticated American image of the average man as a reasonable and rational being. But I do believe and constantly affirm the conviction that man definitely has a capability, though a limited one, for making reasonable and rational decisions, if he has the will, and that in so doing, he can observe a personal ethic, which will reflect such values as those of philosophical stoicism or of a religious theology and belief. Despite the fact that much human behavior clearly reflects the conditioning influences of the environment or the unconscious drives of the “Freudian libido,” there is, I believe, an area of human life in which men and women have the capability of exercising freedom of will.

Absent such a conviction one must have doubts about the capacity of the people to govern themselves. I wonder what the convictions or thoughts of those of you in the graduating class are with reference to the freedom of the citizen and the expectation that such freedom will be exercised within the metes and bounds of a value system which transcends the personal ego—its selfish drives, its psychological needs and its prejudices.

A word of caution is in order. The acceptance of such a basic assumption about self-government must not be interpreted to mean that one must expect that representative government or government by the people will achieve an utopian social order and the elimination of all social injustice—a clean house swept free of all that is not defined as good. That end can never be the hope for this or any country if it is to remain an “open society” and grant the citizen personal freedom. One must be realistic about the ability of people to govern themselves through involvement in politics and, thus, determining how the power of the state be exercised.

Politics, by its nature, I must warn you, can only exist in a free and open society—that is politics as we know and experience it. In countries in which forms of totalitarianism exist, whether to the left or to the right, there is no politics. There is the exercise of political power by the army, a dictator, or a political party, but that is not politics—the sharing of political power. So keep that fact in mind when you are disposed to argue, as many citizens do, that our system of government is inadequate, corrupt, controlled by the special interests, inefficient and intrusive into their private lives. The acceptance of that attitude can lead to non-commitment, non-involvement, and even alienation. It can become the rationale for one to become “otherwise engaged” and to refuse to accept the responsibility that one has as a citizen in a democratic and free society. May I admonish you, therefore, even though I am merely a politician and humble about the prospects for the future, that despite the fact that politics is a grubby business and that it will always be a grubby business, it is the most important business in the country as it relates to your personal freedom and the exercise of your prerogatives and rights as a citizen.

J.D.B. Miller, a contemporary Australian scholar and author of The Nature of Politics, analyzed the political process very thoughtfully and realistically, and his observations are very relevant to the contemporary political scene and are, therefore, worthy of note. The essence of his thought, simply stated, is that the establishment among rival groups and interests of political order—of agreed upon rules for the game—marks the birth of freedoms and that the compromises, deals, half-measures and bargains, which prompt impatient idealists to regard politicians as the “untouchables” and politics as an unworthy profession, are, in actuality, essential to the negotiating process of politics and remain, as history amply demonstrates, the only tested alternative to government by “outright coercion.”

In the last paragraph of his very scholarly work, Miller made the following significant observation:

“Politics does not carry values with it—on the whole, the values used in politics are those of the society in which it is being practiced, and do not derive directly from political operations—but it (politics) may be said to constitute a value in itself, because the alternative to politics is compulsory agreement, in which everything that is not forbidden is compulsory. Interests which inveigh against 'politics' are often those which wish to make a whole society conform to a pattern which they lay down for it.”

Such individuals are “political gnostics”—so convinced of their possession of absolute truth that they have little or no capacity to accept other perspectives or expectations. The self endowed perfection of their goals tends ultimately to force them to vitiate or abandon due process; they possess almost a compulsive urge, therefore, to rebel against the unforgivable status quo. Ultimately, the sanctity of their ideas can become a justification for the use of force, terror, and even assassination.l History clearly instructs one that in philosophical idealism not infrequently lies the seed of authoritarianism.

And as one should not look upon the democratic system as utopian, or try to make it so; one should certainly not, because of its obvious flaws and imperfections, allow oneself to-become alienated from it and to deny it a personal commitment. To adopt either perspective, is to abandon reason and to reject the lessons of history. One should heed the admonition of Abraham Lincoln in his Second Inaugural Address, when he observed in words having a timeless quality:

“With malice toward none, with charity toward all, with firmness in the right as God gives us to see the right, let us strive on to finish the work we are in, to bind up the nation's wounds and to care for him who shall have borne the battle and for his widow and his orphan, to do all which may achieve and cherish a just and lasting peace among ourselves and with all nations.”

Or, one might recall the words of President John F. Kennedy in his Inaugural Address of 1961, when he observed:

“And so, my fellow Americans: Ask not what your country can do for you—ask what you can do for your country. But knowing that here on earth God's will must truly be our own, with a good conscience our only sure reward, with history the final judge of our deeds, let us go forth and lead the land we love asking his love and blessing.”

But should we heed the words and counsel of such men? They were politicians, and politicians have no integrity, nor does politics. That being the case, one may rationalize one's involvement as a citizen and become “otherwise engaged”—committed to one's personal thing—one's personal freedom and fulfillment.

Actually there seems to be less and less of an interest in this country in the shaping of one's life; there is much more emphasis placed upon doing one's thing through the exercise of total personal freedom and autonomy. The assumptions of the founding fathers are denied in word and deed; the admonishings of the nation's great leaders, some of whom gave their lives in its service, are blithely ignored; education in traditional subjects which are designed to teach the meaning of history, the traditions and values of the nation are often defined as irrelevant and significantly ignored or de-emphasized. These trends, which I believe exist, are a result of the unusual emphasis of contemporary society upon the view that life is absurd, that it has no ultimate value and that one must, therefore, find satisfaction in life by being completely one's self—now in this moment in time.

Lionel Trilling in an article in The American Scholar, in the winter 1974-75 issue, commented upon the contemporary scene as it related to higher education and personal values as follows:

“... if you set yourself to shaping a self, a life, you limit yourself to that self and that life. You preclude any other kind of selfhood remaining available to you. You close out other options, other possibilities which might have been yours. Such limitation, once acceptable, now goes against the cultural grain—it is almost as if the fluidity of the contemporary world demands an analogous limitlessness in our personal perspective. Any doctrine, that of the family, religion, the school, that does not sustain this increasingly felt need for a multiplicity of options and instead offers an ideal of a shaped self, a formed life, has the sign on it of a retrograde and depriving authority which, it is felt, must be resisted.”

I wonder what the younger generation of citizens will determine. Will they be willing to shape their lives and govern themselves and perform the obligations of citizenship? Will they be willing to make commitments to their loved ones, to ethical values, to other persons, or will they be “otherwise engaged,” engaged in the pursuit of the freedom and joy of the moment—the life of the butterfly—the shapeless self.

The fact that one may seriously ask this question suggests that America is confronted with a crisis. Joseph Wood Krutch in his thoughtful work, The Measure of Man, commented upon that crisis, the lack of faith in man as an ethical or moral being, as follows:

“It made comparatively little difference whether it was God or Nature, in the eighteenth-century use of the term, on whose permanent, accessible criteria he could rely. In either case he could know what he ought to choose or do, and it rested with himself to decide whether or not he would do it. He was not, as the modern man has come to believe, merely the product of the forces that have operated upon him.”

Addendum

Albert Camus in The Rebel commented that “Politics is not religion, or if it is, then it is nothing but the Inquisition.”

Edmund Burke, an l8th-century statesman, observed:

“Men are qualified for civil liberty in exact proportion to their disposition to put moral chains upon their own appetites. Society cannot exist unless a controlling power upon will and appetite be placed somewhere, and the less of it there is within, the more there must be without. It is ordained in the eternal constitution of things that men of intemperate minds cannot be free. Their passions forge their fetters.”

He also commented:

“For what is liberty without wisdom and without virtue? It is the greatest of all possible evils; it is folly, vice, and madness, without tuition or restraint.”

Jean Grenier, paraphrased by Albert Camus in The Rebel, described the dilemma of the utopian as follows:

“Absolute freedom is the destruction of all values; absolute value suppresses all freedom.”

Robespierre equates virtue and terror

From the Declaration of the Rights of Man to the Reign of Terror seems a long road, but the distance was traversed very quickly by the radicals of the French Revolution. Their pursuit of the virtuous society led inevitably to identification of their own opinions with virtue itself, and then to bloody suppression of all those who did not conform. This crusading aspect of radicalism is perfectly expressed in a speech given by Robespierre on February 5, 1794. (Text reference, p. 505)

“It is time to mark clearly the aim of the Revolution and the end toward which we wish to move; it is time to take stock of ourselves, of the obstacles which we still face, and of the means which we ought to adopt to attain our objectives...

What is the goal for which we strive? A peaceful enjoyment of liberty and equality, the rule of that eternal justice whose laws are engraved, not upon marble or stone, but in the hearts of all men.

We wish an order of things where all low and cruel passions are enchained by the laws, all beneficent and generous feelings aroused; where ambition is the desire to merit glory and to serve one's fatherland; where distinctions are born only of equality itself; where the citizen is subject to the magistrate; the magistrate to the people, the people to justice; where the national safeguards the welfare of each individual, and each individual proudly enjoys the prosperity and glory of his fatherland; where all spirits are enlarged by the constant exchange of republican sentiments and by the need of earning the respect of a great people; where the arts are the adornment of liberty, which ennobles them; and where commerce is the source of public wealth, not simply of monstrous opulence for a few families...

What kind of government can realize these marvels? Only a democratic government...But to found and to consolidate among us this democracy, to realize the peaceable rule of constitutional laws, it is necessary to conclude the war of liberty against tyranny and to pass successfully through the storms of revolution. Such is the aim of the revolutionary system which you have set up... Now what is the fundamental principle of democratic, or popular government—that is to say, the essential mainspring upon which it depends and which makes it function? It is virtue: I mean public virtue...that virtue which is nothing else but love of fatherland and its laws...

The splendor of the goal of the French Revolution is simultaneously the source of our strength and of our weakness; our strength, because it gives us an ascendancy of truth over falsehood, and of public rights over private interests; our weakness, because it rallies against us all vicious men, all those who in their hearts seek to despoil the people It is necessary to stifle the domestic and foreign enemies of the Republic or perish with them. Now in these circumstances, the first maxim of our politics ought to be to lead the people by means of reason and the enemies of the people by terror.

If the basis of popular government in time of peace is virtue, the basis of popular government in time of revolution is both virtue and terror: virtue without which terror is murderous, terror without which virtue is powerless. Terror is nothing else than swift, severe, indomitable justice; it flows, then, from virtue.”

From Pageant of Europe by Raymond P. Stearns, copyright, 1947, ©1961, by Harcourt, Brace & World, Inc., and reprinted with their permission, pp. 404-405.

Our heritage of religious freedom (1976)

2008-10-04T07:30:00.001-07:00

The Rodda Project: The Special Importance of our Heritage of Religious Freedom

General Assembly Meeting
Church Service Bureau

May 11, 1976

In this Bicentennial Year it is important, I think, for all citizens to stop for a moment and reflect about its significance. As I have done so, I have been impressed with the fact that the colonial struggle for independence from England not only created a new nation, constituted as a federal union which acknowledged the independence of the member states, but also incorporated into the Constitution the basic principle of the separation of church and state and a guarantee of the religious freedom of the individual. As the Constitution of the nation has developed, this concept has been more completely fashioned into the character of American life until today it has become one of the most unique qualities of our society and to the founding fathers we owe, therefore, a significant debt of gratitude. Those of us who cherish freedom of religious conscience should appreciate the significance of this heritage and struggle to preserve it.

Perhaps, one of the aspects of the history of western civilization which has most impressed me, as a student of history, has been the tendency of people to utilize the secular power of the state to establish the supremacy of their particular interpretation of the meaning of God and of their particular religious faith or theology. Because this struggle has been so characteristic of world history, it has significantly impressed thoughtful scholars, and most of those who have applied rational thinking to that experience have generally concluded that freedom of religious thought is extremely important.

Voltaire, an 18th century French Deist, who experienced religious persecution in France and fled to England, where he resided for a short period of time, fully recognized the importance of this concept to both the individual and society. His experience prompted him to observe in his Philosophical Letters, No. VI:

“If there were just one religion in England, despotism would threaten; if there were two religions, they would cut each other's throats; but there are thirty religions and they live together happily.”

We today can continue to learn from that observation and also from the study of our own history and that of world civilization. But we will learn only if our study enables us to accept the concept of cooperation among different religious faiths and within those faiths, predicating that spirit of cooperation and acceptance upon the admission or recognition that all of the great religions have much in common.

I can recall reading, for example, that Socrates charged his fellow Athenians in the 5th century B.C. to take care of their souls and to cultivate their minds and their sense of morality so that they might see and appreciate what was good and to direct their whole lives in accordance with the ideal of goodness. Life, he observed, was not to be nothing more than a cog in a machine, but it was to achieve good and the proper care of the soul, which meant the exercise of self-control, the attainment of moral autonomy, and individual emancipation from physical and external circumstances. Socrates was convinced that the most important knowledge was that which was concerned with those ends of life which were moral, and that when a man fulfilled supremely the commands of moral knowledge, he was doing more than that, he was acting divinely, acting as a god should act. In effect, Socrates exalted many of the ethical values that are identified with Christianity—temperance, justice, courage, nobility and truth.

The spiritual quality of this thought prompted Erasmus, two thousand years later, in a moment of religious fervor, to exclaim, “Pray for us, St. Socrates.”

And while Socrates, the Athenian stoic, was reaching such a conclusion, the Jewish people were bringing into existence, Judaism, the world's first monotheistic religion which has survived into contemporary times. It was a religion in which God, the creator, was conceived as both righteous and merciful. David Flusser, a well-known Jewish scholar in an essay entitled “Jesus in the Context of History,” argues convincingly that during the life of Jesus the essential message of the Mosaic Law was well established to be that one should love one's neighbor. It was a commandment to the Jewish people which was in complete accord with the principal admonition of Jesus when he observed in Matthew 7:12, that “whatever you wish that men would do to you, do so unto them. For this is the law of the Prophets."

The reason for this observation is briefly to indicate that the basic value of Christianity is to be found also in the teachings of Judaism. In a substantive way, of course, Christianity departed from the essential ideas of Judaism, since the Christian view of Jesus Christ as God was not and is not acceptable to the Jewish people. The Judaic and Christian churches interpret the nature of God differently, but they agree on the significance of the existence of God and of God's spiritual message to mankind.

Perhaps, this sharing of an essential value is becoming more clearly appreciated by Christians and by those who are of the Judaic faith, and it is important that this understanding become more widespread.

As I make this observation, I am prompted to recall the circumstances which developed as a consequence of my nomination of a Buddhist to be Chaplain of the Senate. Immediately thereafter I began receiving controversial correspondence which reflected a strong determination on the part of some Christians to force the Senate to remove the Chaplain, Rev. Shoko Masunaga, and to replace him with a Christian.

Incidentally, I was distressed to discover that some of those who advocated this course of action would not accept as the Senate Chaplain, a Rabbi, a minister of the Seventh Day Adventist, Jehovah's Witness, or Mormon churches. They were very determined that the Chaplain should be a clergyman selected only from one of the traditional Christian churches, and not from a non-Christian church or a Christian sect. This fact disturbed me, since I am convinced that if the concept of separation of church and state and the ecumenical spirit are to be meaningful, there must be an opportunity for the expression of the religious values of different sects and religions when the members of the Senate, and others present, convey to God their faith, hopes and aspirations for the betterment of mankind.

Incidentally, before I nominated the Buddhist minister to be Senate Chaplain, I reread some works on the origin and history of Buddhism and encountered an interesting fact of history, which I wish to convey to you. The religion, of course, was founded by Buddha in India in the 6th century, B.C., and gradually its spiritual values were introduced to the Christian world in the form of a Christianized version of the life of Buddha. The effect was to produce in the Christian churches of the 10th century an interesting response. Buddha was canonized as a saint by both the Eastern Orthodox and the Roman Catholic Churches.

I have mentioned this only to emphasize again that despite the fact that there are significant differences in doctrine among the Buddhist, Christian and Judaic churches, and in the philosophical reasoning of Socrates, there is a common bond and that common bond is found in the similarity between the basic values which are emphasized and which are regarded as essential to man if he is to find meaning in life. And so, what I am saying, I presume, is that when one studies the inspired thinking of sensitive men in different places in the world and at different times in history, one finds that there is agreement with regard to fundamental moral, spiritual and ethical human values. And this, I think, is , significant, and it is a fact which transcends all others which relate to man and his religious experiences and needs.

Today we must realize, of course, that mankind faces a unique and rather desperate situation because of the impact of scientific thought and the emergence of different philosophical perspectives upon man's understanding of himself. Contemporary man is confronted with a new challenge and it is a challenge not only to the Christian but to all believers, to all men who accept the concept of a divine being and the values inspired from that fact, whether, in the thinking of Francis Schaeffer, it is the faith of orthodox Christians, based upon the Scriptures, or whether it is the faith of theistic existentialists, some of whom regard themselves as Christians, who have made the leap to God.

The condition of contemporary man may be described in the words of a number of contemporary scholars, one of whom is R.G. Rookmaker, who commented in his publication, Modern Art and the Death of Culture:

“The world has changed in the last decade. We have seen a crumbling of a culture. Increasingly, we find ourselves living in a world that is post-Christian and even post-humanist, a neo-pagan world which is nihilistic or anarchist or mystic. We cannot now expect people to follow our rules, our insights, or our morals automatically. We shall be more and more pilgrims and strangers in the world.”

Perhaps, the condition of modern man is described even more substantively and dramatically by William Barrett in The Irrational Man in his observations with respect to religion and contemporary society. He observed:

“The decline of religion in modern times means simply that religion is no longer the uncontested center and ruler of man's life, and that the Church is no longer the final and unquestioned home and asylum of his being. The deepest significance of this change does not even appear principally at the purely intellectual level, in loss of belief, though this loss due to the critical inroads of science has been a major historical cause of the decline. The waning of religion is a much more concrete and complex fact than a mere change in conscious outlook; it penetrates the deepest strata of man's psychic evolution—as Nietzsche, almost alone among nineteenth-century philosophers, was to see. Religion to medieval man was not so much a theological system as a solid psychological matrix surrounding the individual's life from birth to death, sanctifying and enclosing all its ordinary and extraordinary occasions in sacrament and ritual. The loss of the Church was the loss of a whole system of symbols, images, dogmas, and rites which had the psychological validity of immediate experience, and within which hitherto the whole psychic life of Western man had been safely contained. In losing religion, man lost the concrete connection with a transcendent realm of being; he was set free to deal with this world in all its brute objectivity. But he was bound to feel homeless in such a world, which no longer answered the needs of his spirit. A home is the accepted framework which habitually contains our life. To lose one's psychic container is to be cast adrift, to become a wanderer upon the face of the earth. Henceforth, in seeking his own human completeness man would have to do for himself what he once had done for him, unconsciously, by the Church, through the medium of its sacramental life.”

Mankind, observed Barrett, has embraced irrationalism and this new spirit of contemporary man

“... is portrayed by the modern artist who sees man, not as the rational animal in a sense handed down in the west by the Greeks, but as something else. Reality, too, reveals itself to the artist not as the great chain of being, which the tradition of western rationalism had declared intelligible down to its smallest link and its totality, but ... as opaque, dense, concrete, and in the end inexplicable. At the limits of reason one comes face to face with an endlessness; and the artist today shows the absurd, the inexplicable, the meaningless, in our daily lives.”

The message is that contemporary man has lost his religious roots, and, interestingly, he appears also to have lost his expectations that reason will provide his life with a rational order and meaningful purpose.

The observations of the historian, Arnold Toynbee, in his work entitled, Experiences, which, in a sense, is an autobiographical commentary, offered, as a critique of the condition of man, a statement of goals which should be considered most seriously by all who possess a religious faith.

Toynbee contended, and I am paraphrasing him, that adherents of each religion have quarreled with the adherents of every other one; and, within the bosom of each religion, the adherents of different sects have quarreled still more bitterly with each other. This factiousness, malice and uncharitableness, Toynbee contended, has brought Western Christianity into disrepute and has significantly contributed to Western man's alienation from his ancestral religion. And yet in contemporary society religions are reappearing on the horizon in a spirit of mutual charity and this change of heart has removed the age old stumbling block. It has opened the way for these religions to perform for human beings those spiritual services which they have always had in their power to perform, if only they had not stultified themselves as they have in the past by exhibitions of spitefulness and intolerance and, thus, justly brought themselves into discredit.

Toynbee further commented, and I quote:

“The historic religions can give a human being the help that he needs for gaining direct touch with the ultimate spiritual reality behind and beyond the phenomenon of the Universe. Along their different paths toward an identical spiritual summit, these religions can give a human being the spiritual power to break out of his servitude to human technology and to human society and to a true spiritual freedom This is the fruit that can be borne by historic religions' recent change of heart. Is this change going to prove permanent or prove to be ephemeral? It all depends upon its being permanent, and at this early stage of the new era we cannot be sure that the change will last. There are, however, at least two good auguries. The change is such a fundamental one—so complete and a new departure—that it is hard to imagine how it could now be reversed; and it is also a new departure that responds to anew need The present threat to human personality is the greatest peril to which mankind has exposed itself at any time so far since our ancestors became human; the threat to the physical survival of the human race is merely an incidental consequence of this spiritual crisis. The higher religion alone can help mankind to save itself from itself by helping it to regain contact with the ultimate spirituality, which is the ground of being and the source of salvation.

The change of heart is the heart of the matter. If this change is truly to be achieved and achievement is going to be permanent, it will bring with it a change of conduct for the better not only in the relations between human beings in the role of adherents to their respective religions, but in all human relations on every plane of activity. The union of hearts is primary. Questions of doctrine and of administration are secondary to this.”

In this connection, I am reminded of a letter I received from a cousin who commented about the conflict which my appointment of a Buddhist to be Senate Chaplain brought into being. She said that I should keep up the good work. Our grandfather, Richard Rodda, who was a Methodist minister, she observed would be proud of my action.

She further commented that she “... asked Grandfather, when she was a young person, why there were so many religions and how one could know which one to select?” Grandfather answered, “My dear, there are many roads to San Francisco. Some are smooth, some are narrow, some are long, some are short, some are rough and hard to travel, but remember one thing and that is that they all eventually lead to San Francisco. The one you choose is, of course, the one you will prefer to travel, but if you truly want to reach San Francisco anyone of them will lead you there in time.”

My cousin commented that she had thought of the observation many times as she worked with people of many different faiths and it was her opinion that what they all truly wanted was to reach San Francisco. She further observed that a niece of hers had a daughter, June, who was a fully ordained Buddhist minister, and she said, “I certainly do not consider her an atheist. Some of her teachings make very good sense to me, a bit more than the teachings of some of those who belong to other churches.” She concluded: “The good ones will travel the road and they will arrive. The rest will fall by the wayside, whatever road they travel.”

The thought with which I wish to end these comments is that one may disagree with the view that there are many roads to San Francisco and one may believe that there is really only one road. The critical issue, however, is, it seems to me, that the state must not determine the route and direct all citizens along that path. Our founding fathers believed this; they reasoned that it should be a matter of individual conscience; so they introduced the concept of religious freedom into the Constitution. We should be grateful; this gratitude we should acknowledge during the Bicentennial Year. Beyond that,all citizens of religious convictions should heed the admonition of Toynbee that “the union of hearts is primary.”

Collective Bargaining in California (1975)

2008-10-04T07:30:00.000-07:00

The Rodda Project: The Story of SB 160

Albert Rodda's best-known legislation is Senate Bill 160—usually simply cited as “the Rodda Act”—which established collective bargaining for California's public school teachers.

This undated document from the Senator's files contains a record of his extemporaneous remarks on the significance of his legislation, so it is most likely from the latter part of 1975, when SB 160 was signed by the Governor Brown. There is no indication of the venue in which the Senator delivered his speech.

—TB

Collective Bargaining in California

Breakthrough in California

(Extemporaneous Remarks)

Senator Albert S. Rodda

My purpose tonight is briefly to provide some historical background and perhaps make some comments about the critical issues which are affected by the collective bargaining legislation. I'll begin my presentation with reference to the original Winton Act. I was in the Legislature when the Winton Act was passed, and I voted against it although, as a freshman senator in 1958, I was committed to collective bargaining for teachers. I had been at one time president of Local #31 of the California Federation of Teachers in Sacramento. This involvement had influenced my thinking on this issue.

As a teacher, I was of the opinion—having had some experience in matters affecting the professional status of teachers—that they should have an opportunity to negotiate in a more meaningful way with administrators and school board members. So I was supportive of the Winton Act in concept and of collective bargaining in principle. But I voted against the Winton Act on the Floor because of the manner in which those who were on the so-called negotiating council were chosen. There was no exclusive negotiation and no exclusive representation, and in the Senate the word “confer”—not even confer in good faith—was substituted by amendment for the word “negotiate,” which was contained in the Assembly version of the bill. So we ended up with a law which provided for a “negotiating council” which merely conferred and which did not provide for exclusive representation; so I voted “no.”

We are familiar with the fact that the Winton Act was not implemented very well in some districts and, as a consequence, in about 1970, Senator Newton Russell, then Assemblyman, introduced a bill which would significantly have amended the Winton Act. The bill was sponsored, as I recall, by the California School Boards Association. I introduced a bill which was sponsored by the author. We finally reached a consensus and the Russell bill became law. My bill was dropped; although the bills were amended so that they were identical, and the Winton Act was, thus, amended by the Russell-Rodda Act. So, it is the Winton-Russell Act which was amended by SB 160.

The Russell Act was substantive in some respects. In the first place, it contained a definition of impasse. And it introduced language into the Winton Act requiring the parties to confer in a conscientious effort to reach an agreement, which is a little bit better and stronger than just the meet-and-confer provision. There was no written contract, but there was provision for mediation; there was provision for factfinding, but not for publication of the recommendation of the factfinder; so even that legislation fell short of collective bargaining. The Russell Act did contain the same provisions relating to the strike as did the original Winton Act—reference to the Labor Code which courts had interpreted to deny the right of concerted action or the strike—but there were no provisions for a written contract and, of course, no provision for exclusive representation. The absence of a contract provision became an issue in the Los Angeles teacher's strike, which occurred about the same time the Russell Act went into effect.

At that time, the California Teachers Association—and please don't interpret my remarks with reference to any organization as being polarized or biased—did not favor collective bargaining for teachers, while the CFT did. The following year, however, CTA changed its historic position of opposition to one of support. My recollection is that in the same year Senator Dymally authored a substantive collective bargaining bill which was sponsored by both the CTA and the CFT. It was legislation that would have covered employees in the public education system from Kindergarten through the university; the bill was considered in the Senate Education Committee and died there. I voted against it because I believed that we should try to make the newly enacted Russell amendments work.

There was a great deal of momentum being generated for legislation because of the CTA support of collective bargaining. The rivalry between the two organizations, the CTA and the CFT, for collective bargaining legislation for public employees in the public education sector became very intense. In addition, the economies imposed upon higher education by Governor Reagan had the effect of intensifying union activity within the two systems of higher education, especially in the State University and Colleges System, where the whole concept of collegiality had not developed to the extent it had on the University of California campuses. As a result, the California State University faculty moved toward an approach to the problem of employee-employer relations which was more oriented toward the union model—the collective bargaining model. Looking at the membership lists of teacher organizations during those critical years, you'll find that they showed rather dramatic increases, and that fact of life created more pressure. The CFT had long supported collective bargaining, which meant that the School Administrators and the School Board members were fighting a rather difficult and almost losing battle on this issue.

Following Senator Dymally's effort, Senator Moscone became involved as principal author of legislation in 1973. The bill was SB 400 and it included within its coverage employees in public education from Kindergarten through the university system. There were five critical issues: (1) the inclusion of the two segments of higher education; (2) definition of scope; (3) language with reference to strike; (4) the agency shop; and (5) management rights. When the Moscone bill was under consideration, supported by teachers in all segments of public education, the Administrators and the School Board members testified to the effect that it lacked certain language they thought was important and that the language contained in the bill was too far-reaching in some respects. Their concern was the absence of language with reference to strike, the wide-open definition of scope of bargaining, provision for the agency shop, and the lack of the provision with respect to management rights. And, of course, the bill was opposed by the Regents of the University of California and the Board of Trustees of the California State University and Colleges System. I told Senator Moscone, when the bill was presented to the Senate Education Committee, to sit down and try to work out a compromise.

The bill came back before the Senate Education Committee the following week, but there was no compromise. The Administrators and School Board members were not the only uncompromising individuals. The uncompromising people were also the teachers, because they had political muscle in the Legislature and they knew, in a sense, that this piece of legislation would not become law because Governor Reagan would not sign it under any circumstances. I voted for the bill. It went to the Governor and he vetoed it.

In 1972, I had chaired Senate Education Committee interim hearings on this subject, but when the Moscone bill was under consideration in 1973, I did not introduce legislation because I wanted a compromise or consensus piece of legislation to be considered seriously and I knew what was going to happen with respect to the Moscone legislation. I had been in politics long enough to know what the scene would be. I knew that no one would think about a compromise bill; so why waste my time? In that year, however, I assigned Mr. John Bukey to do the principal work in reference to collective bargaining. Mr. Jerry Hayward and Mr. John Bukey, consultants to the Senate Education Committee, and I met in my constituency with School Board members and School Administrators at their request, and they said that they wanted to cooperate in an effort to improve the existing law, because they recognized it had significant deficiencies. I said, “Well, there's no point in my undertaking that kind of task unless you are willing to make some compromises; I have to work with the teacher groups; you're going to have to work with the teacher groups; we're all going to have to work together.” They agreed to such an arrangement.

At that time, I told John Bukey to study the findings of the interim committee hearing, to look at the legislative proposal made by the local group and to consult with the teachers in the various segments of education, and to try to develop a legislative consensus. The idea was to obtain comments from all parties so that I could affirm that all groups had had an opportunity to examine the legislation, to know what the intent was and, therefore, an opportunity to respond in a constructive way.

I stated at the time in response to the proposal made by the local group that “I was willing to introduce legislation and that I would try to achieve a compromise.” Incidentally, a politician may not use the word compromise; so I observed that I would struggle to achieve what we will call a “consensus.” So we strove for consensus and I said, “If I ever obtain consensus in the Senate, I will fight off amendments in the other House introduced by any element involved in this legislative activity which would change substantively the provisions of the legislation,” because if such amendments were made, they would create a bias and there would be no consensus. The bill, which was developed, pursuant to that effort, was SB 1857, and the year was 1974.

Fortunately, we did develop a degree of consensus and John Bukey and I conferred with people throughout the state on the legislation. The United Teachers of Los Angeles and the Classified School Employees of Los Angeles supported the bill despite the fact that it continued the Winton Act language with reference to the strike; despite the fact that it had a restricted definition of scope; and despite the fact that it did not include provision for the agency shop. They also accepted the management rights language. But some teachers challenged me that year with the charge that the bill was “an outright betrayal of teachers.” I argued that “there were some substantive improvements in the bill over existing law.” The bill provided for a written contract; for exclusive negotiation; and there were provisions for impasse negotiations, including mediation and public factfinding with recommendations. These were substantive changes, in my view, I observed. And I also commented on the positive aspects of the creation of a state board and the possibility of binding arbitration of contract, or “rights” disputes.

Meanwhile the courts were interpreting the Winton Act as a consequence of litigation and various decisions were handed down. These various interpretations were helpful in stimulating among the School Administrators and School Board members a desire for a law which could be interpreted in a uniform manner and which would make sense and improve negotiations with teachers. But they did not reach that position overnight. The leadership representing the School Boards and the School Administrators had to travel about the state educating their people and urging them to take a more positive attitude toward the legislation. And I commend them for that effort; without that effort I never could have obtained the kind of support for the bill that emerged. The teachers, from their perspective, were not totally negative, but the two principal organizations, the CTA and the CFT, remained in opposition throughout 1974.

I included the community college system in the original version of the bill. That was my decision. But I excluded the two segments of higher education—the University of California and the State University and Colleges System because there are differences in their internal governance which I did not fully comprehend, but which were of such a nature that they justified in my mind a separate bill or their inclusion in a bill which would cover all state employees. The inclusion of the community colleges was justified because of the similarity of governmental organization and finance to the Kindergarten-12 schools. They were, therefore, included despite the fact that there were problems with respect to the community college academic senates or faculty councils and their involvement in decisions affecting educational policy. I thought we could, with appropriate language, however, resolve that issue. But during the 1974 session I could not bring the community colleges into any kind of an agreement; so I personally deleted them from the legislation, which, of course, was SB 1857.

That legislation, the first product of the consensus effort, in the year 1974, moved to the Assembly, having the approval of the Senate, as I have described it to you, and having the support of the elements I mentioned—School Boards, School Administrators, UTLA and the Classified School Employees of Los Angeles, and a few chapters of CTA and the CFT local in San Francisco. It was opposed by the faculty of the University of California and the State University and Colleges System because they wanted a comprehensive bill; they wanted to be included and they were afraid that if a bill became law which excluded them, they would be left out permanently. SB 1857 failed in the Assembly Ways and Means Committee by one vote, after having been approved by the Assembly Education Committee.

The following year, 1975, I introduced SB 160, which was virtually identical to SB 1857. I did so with grave reservations because Speaker Moretti had introduced in 1974 a comprehensive bill, AB 1243, to include all public employees, which died in the Senate policy committee. And, in the same year, 1974, Senator Dills had introduced—and I had voted for— legislation (SB 32) to provide collective bargaining for local government employees. The Dills' bill was approved by the Senate and moved to the Assembly, where it perished because the Speaker was determined to enact a comprehensive bill. The significance of this action is that total emphasis was to be the enactment of comprehensive, not piecemeal legislation. The Moretti bill was assigned to interim hearings and I was on the joint committee that conducted the interim hearings. The entire intent was to achieve enactment of the comprehensive legislation. The Assembly leadership, Senator Dills, and the new Governor were committed to such action, as were all teacher organizations throughout 1975.

As the 1975 session proceeded, I accepted amendments to SB 160 with reference to the definition of scope which was modestly broadened, and I also introduced compromise language with reference to agency shop. And it is important to understand that an agency shop agreement under the provisions of the bill is a matter which may be negotiated. If a school board wishes to allow it, it may introduce such a provision into the contract; the issue would then have to be submitted to all affected employees for a vote. If the affected employees vote yes, it will be necessary for every employee in that group to pay a services rendered cost fee. The legislation does not provide, however, for compulsory membership; it does not require a union shop. Furthermore, if there is an organization which is competing with another organization to be the exclusive representative, and it loses the election, only the winning organization may have the right of dues deduction. If an organization does not want to compete for the right of exclusive negotiation, if it desires to be only educational organization, it may state that to be a fact with reference to its intent and purpose, and it may then have the right of dues deduction for its membership. This language has been objected to by some organizations because of their position of opposition to exclusive negotiation and to membership protection provisions.

After these amendments, especially the change in the definition of scope and agency shop were adopted, and also after the defeat of all of the comprehensive collective bargaining bills, the teacher groups, the CFT and CTA, began to be more responsive to the bill, SB 160.

During the entire negotiations the School Administrators and the School Boards had accepted the bill as amended and did everything they could to help achieve its enactment. It was because the bill finally had the support of the major elements of the educational community that I was able to achieve favorable action by the Legislature and place the bill on the Governor's desk.

We introduced one major amendment to satisfy the Governor; we changed the membership of the Board. The Board was to have had five members originally, but we reduced the membership to three, all of whom were to be appointed by the Governor. These individuals, it was recognized, might in the future function in the administration of a law affecting all public employees in the state; the Board membership could then be expanded. If that amendment had not been accepted, we would not now have a teacher collective bargaining law. I am convinced of that.

We all kept faith with each other, and it was that kind of conscientious effort that solved a very difficult problem. The School Boards and the School Administrators wanted the law because of the Winton Act's wide open definition of scope as interpreted by the courts; they wanted a negotiating council which spoke for the majority of the teachers; they wanted a vehicle in law which could be interpreted by a state board—the Educational Employment Relations Board—so that everyone concerned could know what the law was, what the standards were, and what the rules and regulations were statewide. And I think that the law has provisions which are for the benefit of the teachers, too. They recognized this; thus, they fully supported it.

The new law is no panacea; its success will largely be determined by the objectivity of its administration by the Board. The educational community has acted responsibly; the Legislature has acted responsibly; it is now the obligation of the Board to act responsibly.

Remarks on AB 489 (1975)

2008-10-04T07:15:00.000-07:00

The Rodda Project: Consenting adults legislation, May 1975

The background to Sen. Rodda's remarks

The story of Assemblyman Willie Brown's AB 489 is one of the most dramatic in California legislative history. Although he was not yet Speaker of the Assembly, Brown was already a powerful and respected member of the Democratic majority. With the election in 1974 of Jerry Brown to succeed Ronald Reagan as governor, Willie Brown knew that he at last had a state chief executive who could be persuaded to sign legislation wiping out certain old-fashioned sex laws that criminalized behavior between consenting adults. Assemblyman Brown knew his measure would be a top priority for many of his San Francisco constituents, especially the gay people for whom every sex act was automatically a crime under state law. But first, Willie had to get the legislation to the new governor's desk.

The State Assembly passed AB 489 by a lopsided vote of 46 to 22, mostly along party lines, Democrats voting for it and Republicans voting against. The big test was in the State Senate, where the Democrats held a smaller margin. After the usual committee hearings and floor debate, the senate clerk began to call the roll and tally senators' votes. Many observers thought that Willie Brown did not have the votes he needed, especially since he could not count on every Democratic senator to vote for AB 489. The tally continued largely along anticipated lines as the clerk worked his way through the alphabet. Then came the big surprise.

The clerk called the name of Howard Way, a conservative Republican state senator from Exeter, a small town in the central San Joaquin Valley. Way was a senior member of the upper house and had even served briefly as president pro tempore of the Senate during a short period of Republican ascendancy. Way replied to the clerk: “Aye.”

The Senate was stunned, as were the observers and press in the gallery. Howard Way was a conservative, but he was an old-school conservative with a strong libertarian streak. He thought about Brown's legislation and decided that the state had no business telling adults what they could or could not do in private.

Way's unexpected vote resulted in a 20 to 20 tie in the State Senate. For some reason, no one had anticipated this possibility, so the one man who could break a tie, the lieutenant governor, was not presiding over the Senate. Mervyn Dymally was, in fact, in the state of Colorado. Emergency jet transport was arranged for Dymally while the Senate went into lock-down. While they awaited the lieutenant governor's arrival, intense political maneuvering began. Dymally could vote only if there were a 20 to 20 tie. In no other circumstance did he have a deciding vote. An opponent of AB 489 had a clever idea.

Newton Russell, an extremely conservative Republican from Glendale (but not in agreement with the vote of fellow Republican Way), asked to be recognized for the purpose of changing his vote. Until the vote was complete (which it could not be in the face of a tie during the absence of the lieutenant governor), senators could amend their votes by calling out to the clerk. The usual practice would be to announce loudly, “Jones, aye to nay” or “Jones, nay to aye.” The practice made it easy to correct a vote (sometimes to seek political cover by agreeing with a powerful member whose vote you had not correctly anticipated). Russell, however, gave it a new spin: “Russell, nay to not voting.”

Russell's ploy depended on breaking the tie, turning the vote into 20 ayes and 19 nays. A bill cannot become a law without a majority vote (21) and the lieutenant governor cannot vote unless there is a 20 to 20 tie. The Senate leadership consulted hastily and the parliamentarian informed Sen. Russell that he had voted and could not withdraw his vote. He could, of course, change it to an aye vote, but he could not simply expunge his nay vote and pretend he had not voted.

Russell disputed the ruling, but could not obtain the consent of his colleagues to overrule the parliamentarian. He had been defeated by alphabetical order, because he had voted by the time Way dropped his bombshell. The status quo held until Dymally finally rushed into the legislative chambers and announced the 21st aye vote.

Some members sent out copies of their floor speeches on AB 489 to constituents who requested (or demanded!) explanations of their votes. Albert Rodda produced a heavily footnoted account, from which the following essay is derived. I have not included all of the appendices, such as the legal opinions on the impact of AB 489 enactment that were obtained from the Legislative Counsel Bureau, but I did reproduce some of the letters that the Senator received in his Capitol office.

When we consider how quaint the AB 489 controversy is today, 32 years later, perhaps we should recall that it was not until the Lawrence v. Texas decision of 2003 that Texas caught up with California in personal human rights—and that was by judicial mandate rather than by any voluntary legislative action.

—TB

Elaboration of my comments on the Senate Floor with reference to AB 489, Brown

The issues raised by the necessity of action on AB 489, Brown, which would delete from the law the penalties for sexual behavior engaged in in private by consenting adults forced all members of the Senate to engage in very thoughtful deliberations in order to reach a decision with reference to their votes.

The legislation was approved by the Assembly on March 6, 1975, and assigned to the Senate Judiciary Committee where, after four hours of testimony and deliberation, it was approved and moved to the Senate Floor on April 17, 1975. On May 1, it was debated on the Senate Floor and approved by a vote of 21 to 20, Lt. Governor Mervyn Dymally casting an historic, tie-breaking vote.

In the Senate Judiciary Committee hearings there were no expressions of opposition from agencies of government charged with law enforcement and the measure had the support of the San Francisco League of Women voters, the American Civil Liberties Union, the National Organization of Women (NOW), the California Bar Association, the California District Attorney’s Association, and members of the “gay” community.¹ It was opposed by spokesmen representing organizations which were primarily religious, including the Conference of the Free Methodist Church, the Greater San Jose Association of Evangelicals, and the Women's Christian Temperance Union of Southern California, and they predicated their opposition arguments largely on moral and religious grounds.

Despite statements to the contrary, AB 489 provided for only two changes in existing law:

(1) It removed criminal penalties for sexual acts done in private by consenting adults. It did not, however, “legalize” such acts; it merely made the decision of whether or not to engage in such acts a matter of individual conscience.

(2) It increased from one to three years the minimum prison sentence for persons convicted of committing forcible sodomy or oral copulation with a minor who is under the age of fourteen.

AB 489 did not remove the present penalties in the law for the solicitation of any sexual act, and it did not, as is contended, change or modify the existing penalties in the law for forcible sodomy or oral copulation with adults and minors above the age of fourteen. Furthermore, it did not affect the prohibition against sexual acts with animals or to remove a teacher for “immoral or unprofessional conduct.”²

The provisions in the Penal Code which make criminal specified types of private sexual behavior and which were repealed by AB 489 were enacted over a hundred years ago, and those witnesses who are engaged in law enforcement and who appeared before the legislative committees volunteered in their testimony that the provisions of the law which were being repealed were archaic, but, more important, clearly inappropriate in a free or open society, since they constituted a serious threat to the privacy of the individual citizen. Such testimony, emanating, as it did, from individuals concerned with law enforcement, constituted rather an interesting commentary on the controversy that surrounded the legislative deliberations involved in the enactment of the legislation.

Those citizens who opposed AB 489, of course, did not interpret the historic law on sexual restraint from such a perspective. They argued most vehemently that all sex acts engaged in by adults which were deviant or abnormal were immoral and sinful and a crime against society. They asserted that the repeal legislation would constitute a serious threat to other members of society, particularly school children. And even informed and knowledgeable opponents who were aware of the fact that the legislation applied only to the private sex acts of consenting adults were firm in their opposition.

Much of the opposition to the legislation was quite specific in its reference to the Bible, especially the Old Testament. And it was affirmed that a vote for the Brown legislation was a vote to legalize sex acts which were in direct conflict with the Judeo-Christian morality and the law of God. The Third Book of Moses, Called Leviticus, Chapter 18 and Chapter 20:10, was quoted to establish the fact that adultery and other forms of sexually deviant behavior were totally contrary to the will of God and that the Biblical punishment for adultery was death. Predicating their case on this fact of Biblical law, the law, they insisted, should remain as it was and has been—a bulwark in the defense of public and private morality. Immoral sexual behavior should remain criminal behavior and be prohibited under all circumstances.³

This vigorous and constant affirmation that sinful behavior should be retained in the category of a crime against the state brought into focus the fact that particular religious groups were desirous of imposing their interpretation of “divine law” upon the rest of society, even in their private lives. The issue, thus, came into focus as one affecting the separation of church and state; at least so it seemed to me, and it was in this context that I began to analyze the arguments offered by the opposition and to relate them to the operating values and principles of American society.

It was frequently represented by most outspoken opponents of AB 489 that the principal factor attributed by the eighteenth century historian, Edward Gibbon, as responsible for the decline and fall of the Roman Empire was the erosion of Christian moral values. This, it was claimed, weakened the Empire internally and, according to Gibbon, denied it the ability to defend itself against its external enemies. A parallelism was drawn between the Roman Empire and the united States of America and the Gibbon thesis was employed in the argument against the enactment of AB 489 on the grounds that it would weaken the basic Christian values of American society, and, as a consequence, contribute to its decline and possible destruction.

To historiographers, however, it is a well known fact that Gibbon viewed the influence of Christianity upon the Roman Empire very negatively. For Christians, he believed, by stubbornly preaching “the doctrine of patience and pusillanimity” and “recommending a moral creed which they did not consistently practice” undermined and weakened the civic and moral character of the citizens of the Empire and, thus, contributed significantly to its downfall.⁴ His interpretation of the history of the Roman Empire, therefore, is contrary to that which was attributed to him by some of the most vocal opponents of the Brown legislation.

Incidentally, Gibbon's interpretation of the fall of the Roman Empire was not shared by Arnold Toynbee, one of the outstanding twentieth century historians. Toynbee, who concentrated his study on the factors responsible for the decline and fall of civilization, did not make as intensive study of the Roman Empire, but his broader study and evaluation of the factors responsible for the collapse of ancient civilizations led him to the conclusion that civilizations traditionally failed from their inability to respond to “crises.” Such failure, which resulted from the inadequacy of leadership, engendered, Toynbee argued, a lack of confidence among the masses and the ultimate withdrawal of commitment. That was Toynbee's explanation of the collapse of past civilizations; in his evaluation of the decline of the Roman Empire, Toynbee concluded that the factors responsible for that failure were under way several centuries before the advent or triumph of Christianity and that the permeation of the Empire with Christian values and ideas was not such a critical factor as interpreted by Gibbon.⁵

My reflection caused me to recall the numerous instances and circumstances in history when established churches sought to impose upon all of the members of society, through the use of the power of the state, a particular concept and pattern of morality and moral behavior. I recalled, also, that it had frequently been the state which, through the use of the secular power, had imposed upon its subjects a code of behavior which reflected a particular religious morality in total disregard for the conscience or the privacy of the individual.

In both instances the technique employed by the secular authority for the imposition of universal conformity to one code of behavior was simply to define particular sins as crimes and to make them punishable by the state.

To a certain degree this was the context, religious and political, in which the trial and crucifixion of Jesus Christ occurred in Judaea in about the year 30 A.D.⁶ The administration of Judaea, at that time, was the responsibility of the Roman Procurator, Pontius Pilate, who was charged with the responsibility of protecting the power and authority of the Roman Empire. In internal affairs, however, the Jewish citizens enjoyed considerable autonomy and governed themselves in accordance with custom and with the law contained in the Old Testament. The Jewish state, therefore, was theocratic in the sense that the scribes, or priestly class, dominated both the religious and the secular lives of the Jewish people and they exercised their power through their control of the Sanhedrin, a quasi-legislative and judicial council, which governed Judaea.

At the time of Christ, the Sanhedrin was dominated by the Sadducees, the most conservative of the three major religious elements in the Jewish community. The descendants of an early ruling class, the Sadducees were very orthodox in their beliefs and rigorously insisted upon the absolute observance of the teaching of the Old Testament, or the law of God, as the moral basis of Jewish society. They were, at the time of the crucifixion, a small but wealthy and powerful element in the Jewish community. Their principal rivals were the Pharisees, a wealthy and more numerous element in the Jewish community who were less orthodox inasmuch as they recognized the authority of tradition as supplemental to the fundamental law of the Old Testament in the determination of Jewish moral values. They were, therefore, more liberal in their observance of the laws and traditions of the Jewish society.⁷

The Essenes constituted a third and important segment of the population of Judaea. Adherents to an apocalyptic faith and dogmatically believing in a resurrection after death and, also, in the coming of the Messiah, the Essenes were, in some respects, closer to the Sadducees in thought and behavior in that they were more inflexible in their interpretation of the law. Inclined toward asceticism, the Essenes frequently engaged in a communal ownership of goods, the practice of celibacy and other forms of behavior characteristic of a style of life deeply religious in character.⁸

Among the Essenes were found a number of small extremist sects, the members of which strongly opposed Roman domination and some of whom were actively involved in “partisan” or underground forms of political resistance and rebellion. The most radical of these factions were called “sicarii” and they were of serious concern to the Roman government and also to the Sadducees and Pharisees, who viewed them as a threat to the peace and order of the state of Judaea. To a certain extent, it appears that Christ, who was identified with the Essenes, was close to, although not part of, the partisan or insurrectionary Essene elements.⁹

Christ evidently preached in small towns and villages and gathered around him small groups of followers. His emphasis upon the doctrine of brotherly love and his criticism of Jewish society for its emphasis upon form and ritual, rather than the spirit of the Jewish religion, brought upon him the enmity of influential groups, principally the Sadducees, and in the context of the uncertain political situation which prevailed, Christ was regarded by them as a potential incitor to social revolution, and, thus, a threat to the peace of Judaea and its enjoyment of quasi-autonomy within the Roman Empire.¹⁰

These are the factors which apparently accounted for Christ's arrest, trial, sentence and ultimate execution. The fact of history which is important to recognize is that the Jewish state, although a Roman province during the life of Christ, was strongly theocratic in character. Life in Judaea was clearly subject to the domination of the religious leaders and the law was a reflection of the moral principles of Judaism. Although Christ was crucified by the Romans, it was only after his arrest on the order of the scribes, by whom he was subsequently tried, found guilty and sentenced to death.¹¹

This close relation between the religious leadership and the secular power subsequently became a characteristic of western civilization in Europe. Depending upon the time and circumstance, the state either dominated the church, or was subject itself to the power of the church.

These conditions emerged despite the fact that the early Christians advocated the separation of the state from religion—in Christ's words they were determined to “render unto Caesar that which is Caesar's and unto God that which is God's.” They consistently affirmed their willingness to maintain their loyalty to a pagan state, but they reserved the right to worship Christ and Christ only, as a matter of religious faith and conscience.¹²

Christian affirmations of loyalty were disregarded, however, and they became the victims of religious persecution. The justification for the periodic persecutions was the persistent refusal of Christians to worship the Emperor as a god or to worship any of the other officially recognized Roman deities. The first incident of persecution occurred in 64 A.D. during the reign of Nero, and Christians continued periodically to suffer persecution for approximately two and a half centuries. The persecutions were ultimately terminated with the issuance of the Edict of Milan by Emperor Constantine in 313 A.D. The Edict provided that each Roman citizen “should have freedom to worship God after his own choice.” Thus, the early principle of the Christians—freedom of religious worship—was implemented within the Roman Empire. In 392 A.D., however, Emperor Theodosius made “orthodox Christianity” the exclusive state religion of the Roman Empire and outlawed all heretical Christian sects and other religious faiths. Orthodox Christianity, thus, became the official church of the Roman Empire and the state dispensed with the principle of separation of church and state which had been acknowledged for almost a century.¹³

In time the Christian Church developed a formal, hierarchical organization and structure, and regional officers, or patriarchs, functioned as the supreme, co-equal ecclesiastical leaders of both the clergy and laity. In the fifth century the Patriarch of Rome became recognized as the Pope, or supreme head of the Christian Church. The claim to Papal supremacy was based upon the Doctrine of Petrine Succession and was established over the entire Christian world, with the exception of the Greek or Eastern Church, which remained schismatic because of its absolute refusal to accept the domination and authority of Rome in matters ecclesiastic. Two separate Christian Churches emerged, and over time minor differences of theology and doctrine gradually developed. From the perspective of the Roman Catholic Church the Eastern Orthodox Church was not only schismatic but also heretical. These differences have continued to the present time.

Slowly the basic theological doctrines of the Roman Catholic or Christian Church were developed and throughout the Christian community of western Europe they were accepted as universal truth. The concept of the Trinity was defined and affirmed, becoming the official doctrine of the Church through the action of the Council of Nicaea early in the fourth century, and slowly the Augustinian doctrine, of salvation through absolute faith as modified by Pope Gregory the Great, emerged, only to give way in the late Middle Ages to the doctrine of “salvation through faith and good works,” a result of the influence of the theological reasoning of St. Thomas Aquinas.¹⁴

The fall of Rome in the fifth century resulted in the destruction of the political unity of the Western Empire and for about a thousand years feudal states dominated those portions of the western world which had been subject to the authority of the western Roman Empire. The Roman Catholic Church maintained its religious unity, however, and consistently proclaimed its spiritual and religious supremacy over all Christians. In the eighth century the Roman Catholic Church succeeded in establishing itself as a secular power through the creation of the Papal States as a result of issuance in 756 A.D. of the Donation of Pepin by the King of the Franks. But the Church was unable significantly to expand its secular authority and the Papal States remained restricted in geographical area and political influence and power. Its expansion was opposed by the independent political entities which had emerged in western Europe after the fall of the Roman Empire. In some instances the secular rulers acknowledged the religious supremacy of the Roman Catholic Church, but even at the height of papal power, during the late Middle Ages, the claim of the Papacy to supreme authority over western European states by virtue of the Donation of Constantine, alleged in the 740’s or 750's to have been proclaimed by Emperor Constantine in the fourth century, was not realized.¹⁵ There were instances in which heads of state recognized the doctrine of Papal Supremacy, but this was far from universal, and as the power of national and territorial states developed, the claims of the Papacy were either ignored or categorically denied. In the latter instance it became the custom of the political rulers to impose taxes upon the Church, withhold Papal revenues, require the trial of the clergy in civil courts and even control the appointment of the ecclesiastical hierarchy. The Church did, of course, retain autonomy in the governance of its internal affairs, but the price the papacy paid for this independence was to sacrifice or abandon its claim to supremacy over the temporal or political states of western Europe.¹⁶

The Roman Catholic or Christian Church, therefore, was the universal church in western Europe and the inhabitants of the various states were Roman Catholics and membership in the Church was official and public, and not voluntary and private. Religious uniformity was enforced by the state and freedom of religious conscience was non-existent. Heretical sects and churches were verboten—there was one church, supreme and universal. And anyone who willfully rejected the essential theological doctrines contained in the Canon Law of the Church, for example, the Trinity, the sacerdotal power of the clergy, the doctrine of transubstantiation, salvation through faith and good works, or the efficacy of the sacraments was guilty of heresy.

The Church, of course, through its ecclesiastical tribunals indicted, tried, and determined the guilt or innocence of those charged with heretical religious beliefs—personal convictions of faith which were contrary to the principal theological doctrines of the Church. And since salvation for the Christian was achieved only through the acceptance of the sacraments of the Roman Catholic Church, as administered by an ordained priest, those individuals who were found guilty of religious transgression were not infrequently excommunicated and, thus, denied access to the sacraments and their souls condemned to perdition. The enjoyment of this power gave the Church tremendous political leverage, even enabling it in certain situations to dominate or significantly influence the leaders of secular states. Their choice was either to conform or risk excommunication, an impossible burden for a secular ruler to carry during the Middle Ages, the “Age of Faith.” The exercise of this tremendous power enabled the Church, also, to control or dictate religious belief and to prevent, therefore, the emergence of heretical sects. The imposition of punishment, other than excommunication, upon religious non-conformists was assumed to be a responsibility of the state through the exercise of its police power. The execution of heretics, which was on certain occasions imposed as punishment was performed by the state, since heresy was both a Christian sin and a crime against the government. Different penalties were invoked by the state in the exercise of its secular authority; sometimes deprivation of civil rights, confiscation of property and exile were regarded as adequate in severity.¹⁷

This condition of affairs, the close affiliation between the state and the church, which was characteristic of western Europe during medieval times and the late Middle Ages and the Renaissance, was not eliminated as a consequence of the Protestant Reformation which occurred in the sixteenth century. In those areas of western Europe which became Protestant the national states, or other political entities, established the same identification with the Reformation, or heretical churches. The Protestant churches became state or established churches and maintained the same authority over the religious life of the people as did the Roman Catholic Church in those areas which retained their loyalty to the Papacy. And in this instance, also, the Protestant state administered the punishment appropriate to the offense or crime against the Church—a crime, of course, which was by law a crime against the state. If the guilt were that of heresy or religious dissent from the doctrines of the established Protestant Church, similar penalties were administered as in Catholic countries, loss of civil rights, confiscation of property, exile, or even death.¹⁸

In the eastern portion of the Roman Empire, or the area known as the Byzantine Empire, which fell in 1453 to the Turks, a thousand years after the collapse of the western Roman Empire, the state dominated the Orthodox Christian Church. The Emperor was both the secular and spiritual leader of the people and maintained a state-church structure which is described as Caesaropapism. The arrangements were unbalanced in favor of the secular power and the Greek Orthodox Church was almost totally subsumed under the temporal authority.¹⁹

A similar structural arrangement characterized the Russian Empire, as it emerged during the sixteenth and seventeenth centuries. By the nineteenth century, the Church was practically apart of the bureaucracy of the Russian Empire. The office of Patriarch, the spiritual or ecclesiastical head of the Russian Church, was abolished and the Church became subservient to the Czar and clearly an integral part of the state. This condition was one of the factors which accounted for the fact that when the Russian communists succeeded in establishing a Soviet or communist state, immediate action was taken to destroy the Russian Orthodox Church and all other forms of organized religion. Religion was required to be entirely private in character and no church was permitted the right to proselyte for members. Freedom of religious worship was drastically restricted, limited almost exclusively to private worship in the home, and Christians and members of all religious faiths were subjected to varying forms of discrimination.

The communist state did not abandon, however, the Russian tradition of authoritarianism—secular control of every aspect of the life of the subject of the state—upon the defeat and overthrow of the Tsarist imperial government. A new church was created, not Christian and not Judaic, but communist, and the new theology was the doctrine of Marx, as interpreted by Lenin and Stalin. Thus, the state became also a church and the Russian people were compelled, as an obligation of membership in the state, to conform to its secular ideology. And membership was, of course, not private and voluntary, but public and compulsory; freedom of conscience with respect to the creed of the communist state was non-existent and not even conceivable.²⁰

Upon the discovery and opening of the New World, western Europeans who desired freedom of religious conscience and who continued to experience religious persecution and discrimination in Europe fled to the New World and became its earliest colonists. Some of the early settlers left the Old World solely for economic reasons, of course, and some were motivated by the spirit of adventure or by the desire to experience a greater degree of political freedom, but substantial numbers left for religious reasons. Their goal was to establish for themselves in the western or New World the opportunity to practice religious freedom and, thus, to follow the dictates of their conscience. But even in colonial America established churches were created by the colonial governments, in some areas Roman Catholic and in others Puritan or Episcopal, and the independent, non-conformists experienced trouble in their efforts to live freely in accordance with their religious convictions.²¹ After two centuries of colonial history, however, the principle of freedom of religious conscience emerged and when the united States achieved their independence and the federal government was created pursuant to the adoption of the united States Constitution, it was recognized that the basic principle upon which the new nation or federal state should be established was that of the separation of church and state. This concept was incorporated in the First Amendment of the Bill of Rights and is probably one of the most important provisions of the Constitution. It established, as a principle of constitutional law, that religion was a matter of individual conscience, and it prohibited the Congress from enacting any law respecting an establishment of religion, or prohibiting the free exercise thereof. The courts have consistently affirmed this constitutional doctrine that the church, whatever its nature, should not impose, through the exercise of the secular power, its will upon the individual citizen. This principle and its enforcement in law and tradition accounts for the variety of religious faiths in this country and the freedom of individuals to pursue their consciences.²²

At this point, I suggest that the issue that was before the Legislature in its consideration of AB 489, was essentially that of the meaning of the constitutional principle of separation of powers.

If the issue could be established as one in which the change in state law being proposed was one which affected only the individual and his privacy as a citizen and that it merely protected individual citizens against the intrusion of the state into their private lives, it would seem to me that it was an appropriate piece of legislation to enact. The debate before us was, therefore, to establish that that was the nature of the Brown legislation and that it did not constitute a threat to the safety and security of society and that it did not change in any way present law which makes a crime of sexual behavior which deviates from normal and which is engaged in outside of the privacy of one's home, or which is imposed upon others through force or through seduction.

This clearly appeared to be the fact and those who argued that such immoral behavior constituted a violation of moral behavior, as stated in the Bible, could hardly justify their demand for the imposition by law of a standard of personal and private behavior which other citizens did not accept as an article of religious faith or religious morality. On this subject, I would like to quote John Stuart Mill's “On Liberty.”

There is, in fact, no recognized principle by which the propriety or impropriety of government interference is customarily tested. People decide according to their personal preference. Some, whether they see any good to be done, or evil to be remedied, would willingly instigate the government to undertake the business; while others prefer to bear almost any amount of social evil, rather than add one to the departments of human interests amenable to governmental control. And men range themselves on one or the other side in any particular case, according to this general direction of their sentiments; or according to the degree of interest which they feel in the particular thing which it is proposed that the government should do, or according to the belief they entertain that the government would, or would not, do it in the manner they prefer; but very rarely on account of any opinion to which they consistently adhere, as to what things are fit to be done by a government. And it seems to me that in consequence of this absence of rule or principle, one side is at present as often wrong as the other; the interference of government is, with about equal frequency, improperly invoked and improperly condemned. The object of the Essay is to assert one very simple principle, as entitled to govern absolutely the dealings of society with the individual in the way of compulsion and control, whether the means used be physical force in the form of legal penalties, or the moral coercion of public opinion. That principle is, that the sole end for which mankind are warranted, individually or collectively, in interfering with the liberty of action of any of their number, is self-protection. That the only purpose for which power can be rightfully exercised over any member of a civilized community, against his will, is to prevent harm to others. His own good, either physical or moral, is not a sufficient warrant. He cannot rightfully be compelled to do or forbear because it will be better for him to do so, because it will make him happier, because, in the opinions of others, to do so would be wise, or even right. These are good reasons for remonstrating with him, or reasoning with him, or persuading him, or entreating him, but not compelling him, or visiting him with any evil in case he do otherwise. To justify that, the conduct from which it is desired to deter him, must be calculated to produce evil to some one else. The only part of the conduct of anyone, for which he is amenable to society, is that which concerns others. In the part wh1ch merely concerns himself, his independence is, of right, absolute. Over himself, over his own body and mind, the individual is sovereign.²³

¹See Appendix, pp. i-iv. Letters of support from the State Bar of California and the California District Attorney's Association. The Judiciary Committee vote was seven “ayes” and two “noes.” [These appendices are not included. —TB]

²See Appendix, pp. v-xii. Letter from Senator Alfred Song, Chairman of the Senate Judiciary Committee and Legislative Counsel Opinions made in response to questions asked by Assemblymen Paul Priolo and Willie L. Brown, respectively. [These appendices are not included. —TB]

³A careful examination of the letters addressed to me with reference to AB 489 indicated that the vast majority of the writers were in opposition and that they were poorly informed about the intent, scope and specific provisions of the legislation. They were of the opinion that it was a much more far-reaching legislative proposal than was actually the case. See Appendix, pp. xiii-xvii, for examples of such correspondence. Usually the statements of the opponents were quite simple, however, and may be classified into three major categories of opposition: (1) that the legislation would violate the laws of God, (2) that it would permit homosexuals and sexual deviates to corrupt the youth in the public schools, and (3) that its provisions would undermine the nation's morality and weaken its capacity for survival. After long study and careful deliberation, I concluded that the negative arguments were predicated primarily upon emotional apprehension and fear and not upon substantive fact. Furthermore, my scrutiny of the correspondence clearly established that there had been no objective and reasonable effort made to inform my constituents about the specific provisions of the Brown legislation.

⁴Peter Quennel, “Gibbon: An Ugly, Affected, Disgusting Fellow,” Horizon, XII (No. 3, 1970) , 82-87. Gibbon was an eighteenth century historian who was powerfully influenced by the rationalism of that era and thought as a Deist, not a Christian. Gibbon was a great admirer of the Roman Empire and in his history of its decline and fall, a work which required twenty years of his life to research and write, observed in the last chapter: “In the preceding volumes of this History, I have described the triumph of barbarism and religion.” This brief statement summarized the thesis which was basic to his interpretation that the fall of the Empire was brought about in part by the German barbarian invasions and the establishment of Christianity as the official religion. Edward Gibbon, History of the Decline and Fall of the Roman Empire (The Modern Library, New York, 1931) II: 1443, 1458.

⁵Arnold Toynbee, Civilization on Trial (Oxford University Press, New York, 1948), pp. 227-252. Toynbee not only disagreed with Gibbon, but reasoned that the development of religious thought and influence has been a positive contribution to the refinement and improvement of civilization and culture. In fact, his hope for the future was predicated upon the expectation that refinements in Christianity as a religion would constitute a significant factor in the future betterment of society and man.

⁶Judaea was a portion of the historic state of Palestine which had been conquered by the legions of Rome under the leadership of General Pompey in 63 B.C. See J.H. Hexter, The Judeo-Christian Tradition (Harper and Row, N.Y., 1966) pp. 1-40.

⁷Kurt Schubert, “Jewish Religious Parties and Sects,” The Crucible of Christianity, Arnold Toynbee, ed., (New York: World Publishing Co., 1969), 87-88. Hereafter cited as Toynbee, The Crucible of Christianity.

⁸Kurt Schubert, “Jewish Religious Parties and Sects,” Toynbee, The Crucible of Christianity, 87-88.

⁹Ibid.

¹⁰Walter Ong, “Second Edition: Secular and Religious,” Center Magazine, VIII (number 4, July/August, 1975), 69-77.

¹¹S.G.F. Brandon contends that Christ was executed by the Romans after his trial by the Sanhedrin because of what appeared to be his leadership in the Jewish struggle against the Roman Empire. S.G.F. Brandon, “The Trial of Jesus,” Horizon, IX (No. 1, 1969), 4-13. This interpretation is rejected by Francis Simmons in “Doctrine and Democracy,” Commonweal, September 26, 1970. Simmons places greater emphasis upon Jewish concern about the nature of Christ’s religious teaching.

¹²Ong, loc. cit.

¹³Traditionally, however, the Roman state, whether a republic or an empire, had dominated the religious life of the people. The head of the church was the pontifex maximus. Edgar E. Johnson, An Introduction to the History of Western Civilization (Ginn and Co., New York, 1959) I: 227-262.

¹⁴Herbert J. Muller, The Uses of the Past (Oxford Univ. Press, New York, 1952), pp. 198-99.

¹⁵Edgar N. Johnson, An Introduction to the History of Western Civilization, I: 388-90. The Donation of Constantine was proved to be a forgery in the fifteenth century by Lorenzo Valla.

¹⁶Steward C. Easton, The Western Heritage from the Earliest Times to the Present (Holt Rinehart and Winston, New York, 1961), pp. 238-43. Bryce Lyon, ed., The High Middle Ages, 1000-1300 (Univ. of California, Berkeley, 1964), pp. 87-117. Johnson, op. cit., I: 634-35.

¹⁷Johnson,op. cit., I:611-613.

¹⁸Georgia Harkness, John Calvin, The Man and His Ethics (New York, 1958) , Chapter XVI, “God and the State.” See also Roland Bainton, The Travail of Religious Liberty, (Harper Torchbooks, TB-30), pp. 33-93.

¹⁹Toynbee, op.cit., p. 179.

²⁰Toynbee, op. cit., p. 182.

²¹“Landmarks of Religious Liberty: The Flushing Remonstrance,” Church and State XXVIII (No. 9, 1975), 8-9. See Appendix, pp. xviii-xix. [This appendix is not included; click the link instead. —TB]

²²Several states retained established churches until the nineteenth century. The Congregational Church, for example, was not disestablished in Connecticut until 1818 and in Massachusetts until 1833. Roland Bainton, op. cit., pp. 26-27.

²³John Stuart Mill, On Liberty (Appleton-Century-Crofts, Inc., New York, 1947), pp. 9-10. Published originally in 1859.

Appendix: Letters from constituents

Many letter writers insisted that AB 489 would legalize bestiality or pedophilia, but the legislation was carefully drafted to address only matters between consenting adults. Sen. Rodda's original document contained legal opinions from the Legislative Counsel Bureau expressly stating these points. —TB

THE LORD IS MY HELPER HEB 13:6

April 14, 1975

Honorable Albert S. Rodda
State Capitol—Room 4048
Sacramento, California 95814

Dear Honorable Rodda:

AB 489 by Assemblyman Willie Brown, a bill now being considered, has come to my attention. It proposes to legalize the following:

Homosexual activities between consenting persons 18 years of age and older;
Remove adultery from the penal code;
Open up the public school classrooms to homosexuals, and to permit homosexuals to be credentialed as public school teachers;
Keep homosexual public employees from being discharged since their acts would not be a violation of state law;
Legalized sex with animals;
Change sex education courses in the public schools to include homosexuality, sodomy, bestiality and adultery, since these activities would no longer be considered “unnatural” or a crime; and last of all
The word “private” does not appear in the bill.

Senator Albert Rodda
California State Senate
Sacramento, Calif.

Dear Senator:

Before you cast your vote in the Senate this week on AB 489, may I share my views with you on its potential long-range effects on our society.

In this era of the serious breakdown of the family unit, I am especially concerned about the legalization of adultery and homosexuality—and specifically the amendment to the Education Code allowing for homosexual teachers. My son came home last week with a parallel situation that brought this all into focus. His young, handsome, personable 8th grade science teacher had told the class about the time not too long ago when he had had too many drinks, he went 80 mile an hour down the highway, had the cops chasing him, etc., etc, Now the use of alcohol is legal, and you can be sure that there were a number of youngsters in that class who are setting their standards by the example of this teacher whom they really admire. Now, IF adultery and homosexuality become legal, our teachers will feel free to speak of their personal lives in these areas. As our young people pattern their lives after the examples of such adulterous and homosexual teachers, we will see a further breakdown in our home and family units.

Perhaps it should be noted also that despite some claims for Church backing for this bill, in a poll conducted by our United Methodist newspaper over a large area, 95% of the people were opposed to the legalization of homosexuality.

We trust that you will cast your vote against adultery, homosexuality, and perversion and that further, you will develop legislation to encourage and strengthen the family unit.

Thank you for your kind attention.

Sacramento, California
April 13, 1975

Chairman
Judiciary Committee
California Senate
Sacramento, California

Dear Sir,

I understand that Assembly Bill #489 which would legalize homosexuality and even allow these deviates to teach in public schools, will be considered at a hearing on Tuesday April 15, 1975. I can’t attend the hearing, but want to lodge a strong objection to this bill. There is plenty of evidence that homosexuals have been responsible for a number of gruesome deaths; it is likely that many others have resulted from the unpredictable urges of these abnormal people.

I think homosexuality should be considered a sickness and treatment provided. We should not accept it as normal personal freedom. Above all, persons practicing this perversion should not be allowed to associate with, teach or work with young people of any age. In addition to spreading the philosophy of their twisted personalities to young minds, there a great danger that they would be attracted to engage in their acts with children and could very well kill to silence or force submission.

I urge you and other recipients of this letter to kill this dangerous bill before it does irreparable harm to defenseless people and to our plunging morel standards.

Sincerely yours,

CC: Gov. Edmund G. Brown, Jr.
Sen. Albert Rodda

A definition of liberalism (1973)

2008-10-04T07:00:00.000-07:00

The Rodda Project: A definition of liberalism

Senator Rodda's files contain many different kinds of documents. One of the more curious works is a letter that he labeled a “semi-finished draft.” He was probably less than completely satisfied with it and intended to keep tinkering with it. The copy I have is dated February 7, 1973. The text itself indicates that Sen. Rodda wrote the letter in response to a query from a friend, whom he addresses as “John.” (Perhaps someone can enlighten me on John's identity.) The Senator presumably retained extra copies in his files for purposes of sharing with other people who had the same question as John: Just what is liberalism?

The Senator hoped, but doubted—despite his own success as a liberal legislator, that liberalism could present itself as a robust philosophy for governance. As we read Albert Rodda's words today, in the context of conservatism's crumbling grip on our federal government, we might consider whether liberalism is ready to wake up and take a stand.

—TB

February 7, 1973
Semi-Finished Draft

Dear John:

You asked me for a definition of liberalism.

A number of years ago I wrote that liberalism “was a social philosophy which emerged from the intellectual, economic and social revolution of the 17th and 18th centuries. As a system of thought reflecting a concept for social organization, it was closely related to the rise of modern industrialization and was in opposition to the ideas and institutions of the ancient regime, many of which continued into the 19th century.”

“Liberalism was essentially an expression of economic and political individualism; in a sense, it was a rebellion against a class society, arbitrary government, religious intolerance, thought control by church and state, economic monopoly, and the doctrine of mercantilism. During the first half of the 19th century, therefore, it was essentially a rebellion against the dominating institutions of European society; by the middle of the 19th century, however, liberalism had become the dominant intellectual and social force in Europe.”

One can generalize by saying that supporters of liberalism possessed the following characteristics: (1) enthusiasm for scientific investigation and confidence in the rational powers of man and the scientific method; (2) the conviction that a better social order could be created by an intelligent application of the socio-scientific thought to the basic problems of social organization; (3) an enthusiasm for individual freedom in political, religious and economic matters, which was expressed in the demand for free political institutions, protection of personal rights, constitutional government, extension of the principles and the practice of democracy; (4) a laissez faire economic policy; (5) hostility to organized labor; (6) religious freedom, separation of church and state; (7) free public education; (8) the advocation of international peace and the development of international laws as a basis for the conduct of international relations, which usually involved opposition to militarism, military conscription and the domination of civil government by the military class; (9) emphasis on the idea that the state was a servant of the people and that it was the function of the state to encourage the development of individuality of its citizens; and finally, (10) the advocation of and support for the national state, structured upon a citizenship of individuals who possessed a common cultural and ethnic background as the basis for political organization in Western Europe.

It was a quality of thought which was significantly affected, molded or shaped by the intellectual, social and political forces which were generated by the French Revolution.

In a general way essential elements of liberal thought were the ideas which shaped the thinking of many of the educated individuals living during the last part of the 19th century.

There were different degrees of liberalism, of course, and the ideas associated with the philosophy changed with the passage of time. Furthermore, many individuals were liberal in one sense, but extremely conservative in another. This is, however, a fairly accurate description of the general principles of 19th century liberalism. It was a mode of thought which was in conflict with dominant ones of the time; between it and the values and ideals of the ancien regime there was constant war.

Toward the end of the century the basic assumption of liberalism, which was that man was rational and reasonable, began to be questioned by thoughtful writers who pointed to the influence of emotion, instincts and conditioned behavior as factors influencing the lives of people and directing it toward non-rational behavior. At the opening of the 20th century, those who advocated liberalism and the political and economic institutions which reflected the basic assumptions of liberalism modified their views, and became known as “chastened liberals.” The assumptions that man was rational, intelligent, knowledgeable and reasonable were no longer quite as confidently accepted. Liberals, nevertheless, continued to express the political view that the best interests of men were served through the institutions and practices of constitutional government—the guarantee of the rights of the individual, preservation of due process of law and insistence upon the rights of dissent and freedom of speech and the press. Liberals were, however, less confident that the liberal philosophy could succeed.

Gradually another modification in the concept of liberalism came about as a consequence of the failure of laissez faire economics to produce social justice. The failure of competition in the market place to provide distributive justice and, subsequently, the failure of the system to avert major economic depressions, cyclical in character and productive of massive unemployment, caused other questions to rise in the minds of liberals. While continuing to urge the basic political principles of liberalism, many liberals began to advocate state intervention in the economic system in order to achieve a greater degree of distributive justice through the use of power of the state to restrict business monopoly. This modification in thought began to distinguish the conservative from the liberal. The conservative, men like Robert Taft, for example, argued that it was important to maintain constitutional government, that government observe due process of law and that there be freedom for dissent and freedom of the press, but the conservative was less willing to accept the idea that the state should intervene in the economic system.

The Depression had an even more massive impact on liberalism, in my view. It demonstrated that economic policies which were designed exclusively to achieve distributive justice were inadequate to cope with the socio-economic problems of the American politico-economic system. John Maynard Keynes contributed significantly to post-Depression economic thinking when he pointed out that the capitalistic system could very easily operate at a level of equilibrium below full employment. Adam Smith, the founder of laissez faire economics, had consistently argued that the forces of the market place would produce an equilibrium at the level of full employment. Keynes in developing his analysis of the forces which determine the level of the National Product, concluded that unless government were effective through the control of the interest rate, the money supply the use of the taxing power and the regulation of public expenditures, the economy might operate at levels of equilibrium which would produce massive unemployment. This condition he feared could lead to the destruction of the capitalistic system. He outlined those policies which he deemed necessary to establish and maintain an equilibrium level at or near full employment.

Liberals became interested in his thought and in the implementation of a public policy which would assure economic growth, increased productivity, high levels of employment, and the avoidance of the disruptive influences of major economic depressions. They became less concerned with distributive justice, reasoning that if the economy could achieve economic growth, increases in productivity and the avoidance of depressions and unemployment, the economic well being of all individuals would be enhanced. This has not proven a realistic assumption or conclusion; the distribution of income and wealth is becoming more unequal. Liberals are again chastened. Not only do they recognize that the assumptions that they made with respect to the political institutions, which were that man was rational, are of dubious validity, but they are beginning to recognize that the assumption with regard to the functional relationship between sheer economic growth and economic inequality may also be of dubious validity. In fact, sheer growth may lead to a widening of the gap between the poor and the rich.

Liberals are also more and more aware of the impact of increases in productivity which are a consequence of technological innovation upon the natural environment. The adverse effects of pollution, exhaustion of resources and the energy crisis, the diseconomies of economic progress is causing greater and greater concern. Related to this concern, of course, is the threat of over-population.

Liberals find themselves in a very uncomfortable ideological position. Today, they are less confident that they know the way—that technological innovation which enhances productivity also promotes social justice and enhances the quality of life. Frankly, I share the liberal concern.

The conservative, continues, however, to believe that he knows the way. Conservative politicians remain dogmatic and psychologically secure, since they are convinced that if we move toward laissez faire economic policies, or non-intervention by the state, technology will provide adequately for the nation's economic welfare. They seem to have no doubts since it appears that the outcome of such an arrangement would conform to their socio-economic goals.

The problem of the liberals is that they are uncertain about how to proceed—how to use the powers of the state in order to give that direction to the socio-economic system which will promote not only economic growth but also the protection of the environment and the achievement of distributive justice.

Frankly, I am convinced that the conservative view, if persisted in, can only promote the destruction of the environment and greater economic inequity and social injustice. The outcome of persistent implementation of the conservative view will assuredly be a society in which there will no longer remain a dedication to the economic and political principles of this country. When this occurs, a rejection of the basic principles and institutions of American society will follow.

I have always been inclined to sympathize and identify with the liberal and yet, as I became more and more aware of the dilemma of contemporary man, I wonder whether the liberal, given his basic assumptions about man, has the capability of responding to the challenge.

I do not know what the creative thinkers in this country, especially those of a liberal persuasion, will conclude, if they examine critically the validity of the basic assumptions of contemporary liberalism and the viability of representative government to achieve the historic liberal goals of individual freedom, economic well being, and social justice.

Freedom: With God or without God? (1971)

2008-10-04T06:45:00.000-07:00

The Rodda Project: Concepts of freedom in contexts of God

Albert Rodda was a lifelong Methodist who was married to a lifelong Roman Catholic. Both Albert and Clarice practiced their religions faithfully, although on close parallel paths, creating a stable mixed marriage at a time when mixed marriages were regarded more askance than they are now. Senator Rodda was thoughtful about his religion, but not doctrinaire. These remarks on human freedom relative to God were presented at the Oak Park Methodist Church in Sacramento.

—TB

To be Free: With God or Without

Oak Park Methodist Church

August 22, 1971

Senator Albert S. Rodda

Is man free, and if so, in what way is he free?

Many responses have been made to this question. This morning, I will consider three.

First, let us review the thinking of Friedrich Nietzsche, a 19th century German philosopher.

Nietzsche made the oft-quoted statement that “God is dead!” He meant that since God was no longer a force in man’s life, God was dead—killed by man! With God dead, man was emancipated—free— free to be himself or to find his own “being.” The question which must be asked is: How did Nietzsche expect that man would use his freedom—his emancipation from God?

Nietzsche saw liberated man as one driven by a “Will to Power,” and it was through power that man would achieve his true self or his being, by becoming a superman!

This conclusion offers a frightening prospect for man. Since man has conquered nature and can unleash to his purposes the destructive energy of which reality is made, the Nietzschian view of man is disturbing. Even in the middle of the 19th Century, Nietzsche, in reflecting on the consequences of his thought, was driven to anguish and terror. Today the prospects for man, so conceived, are even more dreadful.

One can only conclude that if God is dead and man is free and freedom is expressed in a will to power, man must restore God to life; otherwise, chaos will be man's fate and the Biblical Revelation will be fulfilled!

The behavior of man in the 20th Century, as one reflects on the human condition, is not reassuring. It seems to provide more evidence to prove that Nietzsche was right than that he was wrong and the serious contemplation of the new superman described by Nietzsche evokes despair and hopelessness!

The freedom of man is viewed differently, however, by Jean-Paul Sartre; although he, too, proclaims the existence of a Godless Universe. with God dead, Sartre argues that human life is meaningless and absurd!

His is the atheistic existentialist view. There is no God; man is free; there are no values; man is absurd!

A brilliant contemporary thinker, who fought as a partisan in the French Resistance during the Nazi's occupation of France, Sartre writes bitterly of evil. He encountered evil in the Nazi occupation of France.

The evil in Hitlerism was its justification of any behavior, however depraved, as long as it resulted in power. The Nazi interpretation and application of Nietzsche's “Will to Power” led to Dachau and Auschwitz. Sartre witnessed the presence of the Nazi in France; he saw Hitler as evil; he became convinced that evil exists in the world. He concluded that evil cannot be redeemed!

But, concluded Sartre, man, who lives in a Godless world of evil and of absurdity, possesses at least his freedom! It, however, is only a limited freedom—the freedom to say “no!” This is the ultimate freedom through which man fulfills himself or achieves his Being as a Man! The freedom to say “no!”

Sartre sees the essence of life as negative—the freedom to confront evil and to say “no”; man may say: “I will not accept an evil that cannot be redeemed.”

Strangely, this Sartrean view—of a universe, empty of God and pervaded with evil—produced a conviction in Sartre which ultimately developed a close kinship with the “Will to Power” of Frederick Nietzsche. To Sartre the practical meaning of life was the struggle to overcome Evil; in this struggle man fulfilled himself; outside the struggle there was no true being or opportunity for human fulfillment.

The logic of this reasoning can be disturbing, however, since the freedom to say “no” may lead to a Nietzschean “Will to Power.” He who must say “no” might say “no” against his own nature. William Barrett in The Irrational Man reasons that the freedom to say “no” to evil in a context of life void of God and values might be a “rootless freedom”—a “demonical freedom!”

Sartre is a genuine humanitarian—a liberal revolutionary and a man of action; he can be trusted with the exercise of the freedom to resist evil—to say “no!” But the same freedom which he affirms could be experienced by a man of evil will. One can visualize the consequence. Absent a God and eternal ethical values—what is the assurance that freedom will not be abused? Sartre's view of man may merge into nothing more than a Nietzschean “Will to Power!” which produces a race of evil supermen!

Something better is required to respond to the needs of man! The consequences inherent in the proposition that God is dead, killed by man, and that man is free, are not reassuring.

Frankly, the atheism of these men is so stark and the consequences are so disturbing that its contemplation must turn one toward religion and God. This leap to God brings to mind the thinking of Soren Kierkegaard, an early 19th Century Dane, who viewed the mystery of human existence quite differently.

In contrast to Nietzsche, Kierkegaard chose to be a Christian. God, in his view, was not dead and throughout his life he constantly struggled to affirm his personal faith with all of his passion and being. His sole objective in life became that of realizing the “truth of Christ in his own life.”

His primary objective, as a writer, was to define what is meant to be a Christian. His primary purpose, in his personal life, was to “be a Christian.” For Kierkegaard, it was the only way of being a man or of becoming fulfilled.

Desirous of contributing to the betterment of mankind, he speculated as follows:

“So there I sat and smoked my cigar until I lapsed into thought. Among other thoughts I remember these:

“You are going on,” I said to myself, “to become an old man, without being anything, and without really undertaking to do anything.

“On the other hand, wherever you look about you, in literature and in life, you see the celebrated names and figures, the precious and much heralded men who are coming into prominence and are much talked about, the many benefactors of the age who know how to benefit mankind by making life easier and easier. And what are you doing?”

Here my soliloquy was interrupted, for my cigar was smoked out and a new one had to be lit. So I smoked again, and then suddenly this thought flashed through my mind:

“You must do something, but inasmuch as with your limited capacities it will be impossible to make anything easier than it has become, you must, with the same humanitarian enthusiasm as the others, undertake to make something harder.”

This notion pleased me immensely... For when all combine in every way to make everything easier, there remains only one possible danger, namely, that the ease becomes so great that it becomes altogether too great; then there is only one want left, though it is not yet a felt want, when people will want difficulty.

Out of love for mankind, and out of despair at my embarrassing situation, seeing that I had accomplished nothing and was unable to make anything easier than it had already been made, and moved by genuine interest in those who make everything easy, I conceived it as my task to create difficulties.

Pursuant to his determination to make a contribution by creating difficulties, Kierkegaard wrote penetratingly about human behavior, which he categorized into three types: the aesthetic, the ethical, and the religious.

The aesthetic life was one devoted to the enjoyment of the pleasure of the moment and to the avoidance of the unpleasant. The child is the perfect and complete aesthete, existing always in the immediacy and simplicity of the moment. Some adults retain this childlike mode of behavior and never mature. They respond to life simply and live for the moment. In the end their lives sink into despair, as the flowers that delight their lives fade.

Materialists and hedonists share this existence, as do purely abstract thinkers and speculators, who are absorbed in developing systems of philosophy and theology.

The former are consumers of things and events; the latter are analysts and abstractionists. Both are only spectators—observers of life who are detached from genuine life experience.

The aesthetic quality of living is shared by all, but some never advance beyond it—remaining childlike and uninvolved.

When one becomes involved in a choice between values, one advances to the ethical life. By the courageous act of reaching a decision, one begins to live ethically, and with a potential for living authentically!

Since ethics involves abstract reasoning about good and bad, and right and wrong, it can remain outside of life—it can be and often is merely the description of philosophical or theological systems and nothing more.

A philosopher or a theologian can succeed in constructing a complete and logical system of values and yet carry on life in a childish manner, living for the moment. Kierkegaard held that an ethical system without decision or commitment was sheer paper currency without backing. For him, the meaningful life was in living beyond the ethical. It was the religious life, the life that is involved in the uniqueness of the individual—you and I— our singleness in the world. It goes beyond mere abstraction. It is a life that is real in the sense that it transcends the easy and mechanical observance of a morality, simply because it is socially desirable—or socially approved or traditional.

The genuinely religious man must on occasion, in “fear and trembling,” break with the ordinary moral code. If we recall, Nietzsche affirmed the right of the superman to break any moral rule in order to achieve power. Kierkegaard, however, differed dramatically. The individual, he argued, must break with the ethical, but not for the reason of a callous, arrogant seeking for power.

Kierkegaard justified the religious act of moral transgression on the grounds of only one principle. The one justification, which was the core to his Christian faith, was that the individual is higher than the universal principle or the collective morality. The abstract principle cannot, he reasoned, comprehend the uniqueness of the one—the individual, in his concreteness. There are occasions, therefore, when the individual must act alone—in a kind of solitary “suspension of the ethical.”

The average person faces the necessity of making the difficult choice only occasionally and since/whatever the decision, some evil will result, most individuals avoid the necessity of choosing, or of deciding for themselves. They embrace a principle—a moral code—and by applying it rigorously and with inflexibility, escape the real moment of truth in their lives. The rigorous observance of the ethics of the day or of the crowd may provide a convenient cop-out, for no moral blueprint covers all of life's circumstances. There are times when we must choose in “fear and trembling” from within ourselves, not from outside ourselves. Those are the occasions when we stand alone.

The Bible states that “The fear of the Lord is the beginning of wisdom.”

The “fear and trembling” of modern man in choosing is the beginning of self and of self-actualization. And eventually all human beings must cope with the despair which embraces life when ultimately they confront the absurdity of existence.

Kierkegaard believed that at the moment of confrontation of the absurdity of life any response other than the religious was inadequate at best and at worst demonical.

A subjective thinker, Kierkegaard saw truth as inward! The true religion he argued was not simply a system of theology, which possessed the logic of a geometric theorem. To him, religion meant “to be religious.”

Religion must penetrate and permeate our existence, or it is nothing.

A theologian may know theology, but if in his heart God may have never lived or may have died, he cannot be regarded as religious.

An illiterate peasant, unable to state a simple religious creed, may be deeply religious. If he “is in the truth,” people will clearly recognize it simply because of his way of life—his living! A religious person is not a “sorter of creeds”—he is a whole man. His living is the truth—it is the way of the spirit. Kierkegaard reasoned, therefore, that the true Christian follows the law of his being, which is the “way of Christ.”

He argued that without Christ the Christian religion is empty and evil.

Christianity, he vigorously insisted, must concern the individual himself—not pure doctrine, creed, and theological abstraction.

Kierkegaard's thought remains a challenge to secular society, to institutionalized religion, and to the atheistic existential charge that life is absurd!

Christians, through faith in Christ, through living the Christian life in the context of the scriptures, can transform their own lives and influence the lives of those about him.

The difficulty that Kierkegaard created was the challenge of the Christian to be a true Christian—a religious man! There can be no greater difficulty; it goes beyond living for the moment or living according to the code of the day.

“What does the Lord require of you but to do justice, to love mercy, and to work humbly with your God?”

When two Christians meet, a field of spirituality must come into existence; it if does not, one must ask: Are they truly Christians?

Tuition at the University of California (1970)

2008-10-04T06:30:00.000-07:00

The Rodda Project: Paying for a university education

Ronald Reagan insisted on two things upon taking office as governor of California. One was the head of Clark Kerr, president of the University of California. The second was the imposition of tuition on UC students. Kerr was soon gone, replaced by Charles Hitch. The Regents of the University of California also agreed to impose education fees for the first time on the university's students. Excuses were made that the new fees were not really the adoption of tuition, but Senator Rodda insisted that the fees were exactly that—a violation of the university's long history of tuition-free public education. Tuition meant payment for education, while student fees were presumably payment for incidentals. The line between the two concepts was being blurred—or even erased.

Once the fees were in place, it naturally followed that the Regents could not resist raising them periodically. In this paper, prepared by Sen. Rodda to provide information to his Democratic colleagues, the Senator refers to a pending proposal to set student fees at $600 per year by 1971-72. By way of comparison, University of California undergraduate fees were $8129 in 2005-06.

Sen. Rodda also refers to the community college system in this paper. Tuition was later imposed on community college students, an explicit tuition system based on a payment per academic unit. Tuition-free higher education in California belongs to history, not the present. Rodda was prescient in his warning.

—TB

Tuition: Considerations of Interest to Democratic Legislators

March 1, 1970

The escalation of the tuition by the Regents on February 20, dramatically reveals that we are now in what I have described as the “era of the politics of tuition.” It is no longer possible semantically to argue that we have not adopted the tuition principle in California because of the Regents' action and we can expect tuition consistently to be more a matter of budgetary consideration in the future and we can expect, I suppose, an even greater escalation in tuition.

The following figures are rather interesting: In 1956 the fee at the University of California for a semester was $42 or $84 a year; in 1957 the fee went to $50 per semester or $100 a year; in 1958 it went to $60 a semester or $120 a year; in 1962 it went to $75 a semester or $150 a year; in 1964 it went to $110 a semester or $220 per year: and in 1968 it went to $107 a quarter or $160 a semester for a total of $320 per year.

Fees, as between 1957 and 1970, increased, therefore, from $84 to $320, which means that they have increased four hundred percent, which is certainly much greater than inflationary increases over that period of time.

The Regents acted on February 20 to provide for an increase in the admission fee for 1970-71 over present levels in the amount of $150 a year or $50 a quarter, which means that the fee will be $320 plus $150—about $470 per year. In 1971-72 the fees will go up an additional $150 and reach the neighborhood of $600, having doubled over a two-year period. This is for undergraduates. Because of Reagan amendments to the modified Hitch proposal, graduate students will pay an additional amount which will be $180 the first year and $360 more the second year, which means grad students will be paying in 1970-71 about $480 per year and in 1971-72 about $660 per year.

Incidentally, no provision, as a consequence of the action taken by the Regents, was made with regard to low-income students, although the increase in revenues which will amount to about $7 million, as I understand it, will go to the University to be used for the purposes determined by the University.

Statements were made to the effect that every effort would be taken to utilize current scholarship and fellowship funds to take care of needy students. But, no specific action was taken, and, of course, this means that the students must take a means test. to obtain the additional money necessary to attend State College.

A $200 tuition increase produces $9 million. Since the University increased the tuition to $150, the state will be saved about $7 million. With a California population of 20,000,000 that is about 459 per person per year. The increase, however, will adversely affect the ability of students to attend because they must project the increased costs into the future. A student contemplating entering the University this year, who financially is a marginal student, will have to have $150 more income next year, $300 in 1971-72, and if there is no increase thereafter an additional $300 for two years in order to achieve an AB degree. This means that his increased expenses will be $1,050 over four years.

If the recent history of the tuition increases mean anything, a student can be assured that the tuition will be in excess of this amount by 1972-73 because the tuition, which is now a matter of budgetary politics, will, I am certain, be escalated.

A critical fact that is important is that Section 23753 of the Education Code provides that State Colleges may not levy a tuition in excess of $25 per year or $12.50 per semester. Out-of-State residents and foreign students pay tuition fees. They also pay the regular fees which the resident student pays.

The difference between a fee and a tuition fee is that a fee is used for non-instructional purposes—it is for student services such as parking, materials, medical health care, etc. It also is for student association buildings and things of that nature. There is every reason to think that the State Colleges, which now have combined fees of $158 a year, are in violation of the law. Certainly, if the State Colleges raise the fee to match the University's increase in tuition, the State Colleges, in my view will be in violation of the law because some of that money will certainly be used for educational purposes.

The point that I am making is that before the State Colleges can increase the State College tuition to match the level of the University's increase, the language in the Education Code will have to be changed. This will take an urgency clause if it is going to be put into effect for 1970-71. If this change is not achieved, it seem to me that there will be an immeasurable diversion of students from the University to the State Colleges next year. There is quite possibly likely to be, therefore, another crisis in enrollment, at the State Colleges, because we probably will budget adequately to take care of the University of California enrollments, but we will underestimate and under-budget the State Colleges.

The critical factor at the State Colleges is instructional staffing. In a couple of years the problem will be one of building—libraries, cafeterias, faculty offices, and things of that nature. Right now it is primarily a matter of staffing.

The Governor does not want lines of students denied admission to the State Colleges or the University next year. Every effort will be made to stop this, but I think that it will be very difficult to accomplish such a goal because of the confused picture with regard to tuition.

Incidentally, if students are diverted from the University, many will go to the community colleges as well as to State Colleges.

The community colleges, under the law, must accept all students with a high school diploma and all who are 18 years of age or over who can benefit from an education. This is the open-door policy and, of course, the law imposes the non-tuition principle on the community colleges.

The community college situation is interesting.

At the time the Master Plan was developed, the community colleges were funded by the State at about 29% of educational costs, or 29¢ out of a dollar. The Master Plan provided that, by 1975, 50,000 students who normally would attend the University and the State Colleges would be diverted to the community colleges. In order to assist the community colleges in funding this increased enrollment, it was agreed that state financial support of the community colleges would be established at 45% and that there would be state contribution to capital outlay.

Today the state has met its commitment with regard to capital outlay and 50% of community college construction, statewide, is paid for by the State. A state bond issue, which I authored in 1968, provided $60 million for community colleges. About $45 million of the bond issue is still available, although the bonds cannot be sold because of the bond market.

Additional money was provided for capital outlay in Assembly Bill 606, 1969 General Session, for community colleges. With regard to the educational expense, however, the state has increased its level of support for community colleges only to about 33%—well below the 45% level of the Master Plan. sixty-seven percent of the statewide education costs of community colleges are borne by the taxpayer.

Many community colleges are at or near their tax ceiling and it is very difficult for a community college to pass an override tax. This means that if the Governor does not substantially increase the support level for community colleges in 1970, the State's contribution will drop probably to the neighborhood of 30%. Local support will, thus, increase to the neighborhood of 70%.

Remember that the community colleges must enroll all of those students who are qualified who offer themselves for enrollment. This fact of law quite possibly could lead to serious difficulties if districts are not successful in passing overrides, or at least it may bring many up to their maximum tax ceilings. It will definitely produce a crisis in community college education and will shift an increasing burden of higher education on to the community colleges and the local taxpayer.

In summary, the thing that must be pointed out is that the principle of no tuition was abandoned by the Board of Regents in spite of the fact that they describe the increase as a fee. The increase was so substantive that the semantics of language cannot conceal the fact that a University tuition is in effect. We now are in the era of tuition. We have abandoned a 101-year tradition which has been supported by fourteen Republican Governors and seven Democratic Governors. The Regents no longer have a principle of no-tuition to stand on. They will have to bargain on the tuition question and tuition will now become a part of the budgetary debates and deliberations each year. These are some statistics on education: In 1968 out of 1,000 students who entered school, 800 will graduate from high school and of the 800, 540 will enroll in some institution of higher education as freshmen, of the 540 who enroll as freshmen, 250 will complete more than the first year. Of these 250, 100 will obtain baccalaureate degrees.

Obviously we need to increase .the persistence rate in the field of higher education, since our society requires a higher quality of education on the part of its citizens. Anything which increases the cost of education tends to lower the persistence rate. This is one adverse effect of tuition.

Incidentally, only 10% of the students complete sixteen years of education or achieve the AB without interruption. Tuition will further prolong the time required for an education through the AB.

One-half of the families in this state have incomes below $8,000. 23% of the University of California students have family incomes below $8,000; 14% of the State College students have family incomes below $6,000, and 4% below $4,000. Unless student financial aids are increased, the increased tuition will cause poor students to drop out of college:

10% of the nation's population is in California, but California has received 40% of the research money from the federal government. This statistic indicates the importance of higher education in California to our economy.

Arguments against tuition:

Adversely affects low-income families, therefore, has a more drastic impact on the minorities.
Will shift a greater portion of the cost of higher education to the local property tax, because of a transfer of students to community colleges.
Will reduce the access to education in graduate areas exclusively assigned to the University (medicine, law, architecture, and veterinary medicine and doctoral programs in all subject matter disciplines).
Will adversely affect California's competitive position in higher education which has made the State outstanding in technology and research.

The Christian and the Democratic Process (1967)

2008-10-04T06:15:00.000-07:00

The Rodda Project: The Christian's Role in Politics

Senator Rodda delivered this speech on January 30, 1967. His audience was the School for Christian Church and Service of First Evangelical United Church.

The Christian and the Democratic Process:
or
“What on earth are we doing about getting good government?”

In opening a discussion of this type, it might be well to quote or paraphrase a number of the world's leading thinkers who have commented upon the nature of government and, also, the meaning of democracy. In this way, perhaps, we may establish the context in which the discussion will develop.

It is my intent this evening to discuss, as clearly as I can, the meaning of the democratic, or open society, and to relate this system of government to the individual citizen, with particular reference to the Christian.

As I reflect upon the governmental process and through it the exercise of political power, I am reminded of Plato’s “Republic,” the first instance in western history in which the nature of government was examined in a substantive and rational manner. In this work, as I recall, Plato concluded after a careful analysis that the purpose of government was the achievement of justice. And I am also reminded of a comment that is alleged to have been made by Plato's student, Aristotle, and I paraphrase him, to the effect that “all governments eventually fail because of an excessive development or implementation of the basic principle upon which they are organized.”

Since our government is thought of or usually defined as a democracy, one wonders whether the observation of Aristotle will prove relevant. In effect, one wonders whether our system will fail because of an excessive development of the democratic principle or ideal upon which it is established. One's concern is heightened when one realizes that the meaning of democracy and the way in which the democratic processes of government have been developed in this country are badly understood or poorly appreciated by many citizens. Since a meaningful discussion of the citizen's role in government presumes an understanding of its essential character, I will briefly paraphrase a number of individuals who have remarked about democracy, either by way of definition or by way of a commentary.

Carl Becker, a famous American historian who is a specialist in the 18th Century, is quoted as describing “democracy is a tremendous gamble for the highest stakes.” This epigraph conveys dramatically my feeling about democracy and my own concept of its meaning. Certainly, democracy is a gamble and it must be a gamble because of the very essential idea behind it and because of the fact that its proper implementation provides no guarantee that the best interests of the people will be served or that its finest goals will be achieved, for example, the goal of justice.

Through democracy the “good world” may be realized, but not necessarily. George Bernard Shaw who remarked that democracy is that “system of government which guarantees the people what they ought to receive” focused on the essential element of the democratic process.

Through democracy the people exercise the final control over government and the uses to which governmental power may be put. This offers some assurance that government will serve good ends, but its great virtue is that if it fails, the failure will be the result of the failure of the people. Democracy guarantees, as Shaw remarked, that whatever the people experience—good or bad—it will be their doing, their responsibility; their government will be no better or worse than the people deserve. Can free men ask for more!

Despite this characteristic of the democratic system of government, the validity of democracy is being questioned and challenged today as never before. There are many who reject the verdict of Winston Churchill, who stated that “democracy was the worst possible form of government, only that it was better than any other.”

While democracy has many detractors, it also has many friends, and frequently its friends seek to rescue democracy by developing a concept of what democracy is in order to provide a norm or standard toward which we may move. Unfortunately, in most instances in which this is attempted the norms or models selected are not a true reflection of the American democratic process. To the extent that the model is an “ersatz” one, the well-meaning intentions of the friends of democracy tend to produce more confusion and, therefore, greater hazards for democracy. A few cases of “mistaken identity” may be cited.

For example, a case is made for what is described as “democracy as the American credo.” An appeal to history for legitimacy, the concept suggests that there is in existence an American creed or faith which can be extracted from the story of American history. Actually, the historical past can help us to understand the present, but it cannot provide a concrete, specific statement of democracy as a particular institution or event of yesterday, nor can it suggest what it ought to be today. The American Revolution, for example, solved only one question—the separation from Great Britain. It did not itself lead to the establishment of institutions, which by virtue of a consensus, may be looked upon as the legitimate or authentic form in which American democracy was cast and in which it should remain for perpetuity. The government which we know today actually developed out of prolonged disagreement and controversy over fundamental issues which were extremely intense in 1776 and 1789. A disagreement over basic ideals and institutions was the focus of controversy and it has carried on down to the present. It is foolish and transitory, therefore, to think that one may find in 1776, 1789 or 1865 an idealized form or model for American democracy.

Another model is that of democracy regarded as a religious faith. From this perspective it is suggested that the traditions of the Judeo-Christian religious morality provide an appropriate basis for a delineation of life upon a theistic view of the world which stands in contrast or opposition to the communistic ideal which is predicated or established upon an atheistic cosmic view. Unfortunately, the theistic model derives, also, from a misreading of American history, since American society developed out of a conviction that government could not provide a religious faith. Our society is actually founded on a commitment to provide the fullest possible freedom of expression in matters of theology and religious belief and this, therefore, is the only sense in which one can relate American democracy to Christianity or Judaism; it cannot otherwise be regarded without the risk of a crude distortion of the facts of our historical origins.

We must, it is sometimes argued, identify democracy or the democratic system of government, with capitalism. This interpretation arises from a confusion as to the distinction between the economic and political institutions of our country. Capitalism defines or describes the basic institutions we have developed for the production and distribution of economic goods. Democracy describes our political institutions and our governmental processes. To equate democracy with capitalism, therefore, is to insist upon an identity which is totally irrelevant to reality.

Historically, American society has given expression to forces supportive of capitalism and also forces which have been in opposition to it. We simply may not, therefore, equate democracy with capitalism, nor may we, on the other hand, equate socialism with totalitarianism. History does not reveal any particular mutualism between capitalism and democracy, neither does it identify collectivism or non-capitalism with totalitarianism. History records, on the contrary, that democratic processes of government are sometimes associated with socialism and that in contemporary European countries they have, when joined with a considerable amount of socialism, provided a principal defense against totalitarianism.

Moreover, capitalism, the full historical record reveals, has frequently been associated with colonialism and with political systems and structures which are anti-democratic. The hazard encountered when we equate democracy with capitalism is that we immediately place the economic status quo beyond the reaction of public opinion. Such an identification might, therefore, actually lead to the destruction of democracy itself, since any attempt to modify capitalism through the ordinary procedures of the democratic society, such as discussion of ideas and public criticism, might, because it constitutes a threat to capitalism, lead to the abandonment of democracy.

Another model is encountered in the identification of democracy with American constitutionalism. In this particular search for the real or true ideal, democracy is visualized as federalism, as the check and balance system, and as the separation of powers. Actually, these features of American constitutionalism are neither the essence of democracy nor are they essential to it, here or anywhere. Their existence in some instances has, in fact, hindered the development of democracy in America. They came into being largely as a necessity of political compromise, as a means of resolving differences peculiar to the united States. Federalism, for example, grew out of the political arrangements which were characteristic of our country's colonial history. The practice of checks and balances and the separation of powers, while an outcome of early colonial experience, was really an improvisation which was introduced into the basic elements of the government of the United States in order to thwart the popular will, or to avert what was commonly described as the tyranny of the majority. It would be improper, therefore, to hold that these characteristics of or elements in our constitutional arrangements are the essence of American democracy. Democracy can and does function effectively in other countries under institutions which certainly do not contain any of the elements of federalism, checks and balances and the separation of powers.

The identification of democracy with a faith or a credo, specific economic institutions, or certain unique features of our Constitution do a disservice to the concept. They reveal a failure to understand it. This sadly is one of the hazards which confronts our society today, because, as has been pointed out earlier, if we fail to understand what democracy really means, we certainly will be less competent to preserve it. If we struggle to realize a false image or model, we will quite likely give ourselves a directional impulse which is inimical to democracy.

We must know what democracy really is and means~ we cannot afford to act on the basis of a mistaken identity. We must know, also, that by virtue of its very essence, democracy presents a dilemma—the dilemma is how to maintain democracy despite the fact that within its essential essence may lie the seed of its own destruction.

The concept of the open society is the essence of the meaning of democracy; it, also, is the source of the democratic dilemma.

Anthropologists contend that in all societies there are certain “cultural universals.” These are the basic beliefs that hold a society together and give it meaning to its members. They are shared universally and once accepted become the embodiments of the spirit of the culture and they so permeate a society that they exclude other or alternative values. Institutions and practices tend, thus, to be opposite to or inversely related to others. This is true since they tend to implement or reflect competitive or opposite values; therefore, they are exclusive—monogamy excludes polygamy, for example.

If we are to appreciate the character of the open society, we must recognize that universals cannot be recognized as constituting such an integral part of the life of the society that they must be universally and rigorously imposed upon the people through the exercise of the political power of the government. Of course, such an admission does not carry with it the implication that a democratic society does not have or cannot rest upon a common set of values. Actually, a free or democratic society must have such values, but they must relate to the society in a different manner than those which are found in a rigorously structured society, whether extremely primitive or of a modern totalitarian character. The cement that binds a democratic society together is unique; whereas, there are no substantive universals imposed upon the citizen by law, there are certain processes to which there is universal commitment incorporated in the body politic. These can be regarded as “procedural universals,” and they are absolutely fundamental to the democratic society. They are the essential freedoms and constitutional guarantees, such as the freedom of speech, freedom of conscience, freedom of press, freedom of association, and freedom from arbitrary action of the government, or, in essence, due process of law.

Another universal or basic absolute, you might say, of the free society, is the integrity of the individual—the requirement that the citizen must be regarded at all times as an individual possessing fully and equally with all others the same basic rights under the Constitution and the same freedom to be involved in society.

These are the essential ideas of the free society and they are vital to the preservation of it. When they exist, it is impossible for an authoritarian or totalitarian system to come into being and it is only when they do exist that a free society can be said to be operative among people.

The general idea that derives from this condition, of course, is that there must be some common values—such as the necessity of speaking honestly, or seeking the truth, of dealing fairly with opposing views, and of acting with integrity toward the existing institutions of a country, of recognizing due process of law, and of exercising self-control or engaging in responsible personal self-government. In a free society it is essential that one is concerned about means as well as ends and that one avoids making the means the ends of society—in other words, making the control and the use of power the end of government.

Power must be exercised with the understanding that power is not absolute and that it must be used constructively—at all times with due respect for the rights of the individual. These are the essential universals of the democratic system as it pursues its search for truth and for social justice. This unending quest for truth is the thing that will make men free. While it continues there will not be a final attachment to an idea, an ideology, to a faith, or to a particular value which characterizes totalitarianism in its many forms. In its essence, the free society means that all substantive questions are open to question.

Doctors John Livingston and Robert Thompson in The Consent of the Governed have stated it as follows: “... the ideal of democracy requires that all universals be procedural rather than substantive and that all questions ... be at least potentially open ones.”

A qualification is that it is not likely or even desirable from the point-of-view of social stability “that all matters will be in dispute at all times. It is only necessary that they be potentially open“ for evaluation. This essentially is the difference between a totalitarian and democratic society—that is, “The totalitarian state operates from an authoritative all-embracing ideology which furnishes answers to all human problems and standards of taste and judgment and all human relations” at all times.

A pluralistic or open society is one “in which government does not prescribe the interests or opinions of its citizens and in which, therefore, forms of group life may flourish at the initiative and discretion of citizens.”

Having defined the democratic idea, or model, as a system of government in which the citizens are charged generally with determining who will govern them and only incidentally are engaged in the actual process of government, I will undertake to relate this system to the individual citizen.

A question that one might pose is whether the government which democracy provides is good or bad. In reflecting upon this question, one must realize that goodness is purely, in the political sense, subjective and relative.

There appear to be no objective and absolute criteria of goodness insofar as the ends of government are concerned; goodness in this context is strictly relative and a matter of opinion. As a consequence, any value judgment about the goodness or badness of government will of necessity be debatable. However, one should, in reflecting on this problem, keep in mind the obvious fact that democracy itself is not an end of government and that the existence of democracy does not of necessity result in conditions which are automatically or of necessity in conformity with the public good. A democracy is merely a method of government; it may lead to good or bad government. We, therefore, must constantly remind ourselves that democracy guarantees only one thing—that the citizens will control their government and that there is no guarantee as to the quality of the result of that government.

Whether the product of democratic government is good will depend, I suppose, on its ability to provide for the public or the general welfare. This, too, will depend, I think, upon the level of involvement of its citizens, the knowledge that the citizens have of problems of government, and the freedom that they enjoy to debate issues and to exercise the right of dissent. Such conditions are absolutely essential to the ultimate success of government by the people, they will provide, if the consensus or majority view proves inappropriate or contrary to the general welfare, a means through which change may be achieved and the minority point-of-view elevated to the level of a consensus. In this way democracy can and may provide a means for improvement and for the implementation of the good life by peaceful, evolutionary change, by revision and adjustment.

The good life probably, if it were to be defined in terms of specifics, would include the following:

the preservation of the freedom of the individual to fulfill himself as a citizen;
the creation of a continuing opportunity for the citizen to function within the economic system on a level commensurate with his abilities;
an assurance to the individual of a position in the social system fully equal to that of any other individual, in effect status free from any form of discrimination which, deriving either from law or custom, assigns him an inferior position in society for any reason not related to his qualities or capabilities as a citizen;
the protection of the independence of the state and the preservation of its sovereignty against external aggression;
the creation of opportunities for the individual to develop fully the capacities of mind, spirit and body necessary for meaningful involvement in society in all of its aspects—cultural, educational, political;
adequate provision for dealing with the problems which, while affecting the general well being, do not lend themselves to treatment on an individualistic basis; (examples of such a need would be that of education, elimination of air and water pollution, conservation of natural resources, community planning, national defense, and so on. Obviously, in an expanding, dynamic society such as ours, there will be an expansion of government into areas of activities which are of such a character);
stabilization of the economic system in order to provide reasonably full employment, economic growth and expansion and a fairly wide diffusion of the national income among the citizens of the state;
protection of the society through regulatory activities to check the abuses of monopoly or economic individualism;
maintenance of law and order—the protection of property, civil order and public morals—the exercise of the police power of the state; and, finally,
provision for a fair and speedy administration of justice through an honest and efficient judicial process.

Obviously, these criteria are not intended to be all inclusive, but they do, I think, offer a fairly selective and comprehensive list against which we might evaluate whether or not one's community conforms to the standards of a good society. Of course, it is apparent that any evaluation of a community or a society in terms of success or failures in these areas will be subject to disagreement, and quite possibly the principal areas of disagreement probably would center on the following:

National defense. The question which might be raised would be whether or not the government is adequately dealing with the communist menace, both as an ideology and as a form of political and economic aggression.

Civil rights. The question might be whether or not the government, under certain conditions, ought or ought not to protect citizens in their constitutional rights as citizens.

Civil liberties. Another closely related area of difference might be that of civil liberties—the issue being whether or not specified government policies might constitute a substantial interference with freedom of press and speech or the exercise of those basic rights which are essential to the preservation of a free citizenship.

Economic stabilization. Here the disagreement might very well be whether the government is proceeding too far with the regulation and taxation of business and is engaging in activities of an economic character which are harmful to the economy and, therefore, inimical to the economic goals of the society.

Welfare. The question might certainly be raised as to whether the government is undermining the moral character of the people through its efforts to compensate through welfare programs for the economic inadequacies of the economy and the poverty of many citizens.

There are other areas of major differences which might be mentioned; these, I believe, are the principal ones.

The critical factor in a democracy is that government is the responsibility ultimately of the majority of the citizens. Meaningful majority rule explicitly requires that government be aware of the public well being and that it attempt to advance it to the best of its ability—acknowledging at all times, however, the limits upon its power—and, therefore, while implementing programs as a means of achieving its objectives, preserve the maximum area of freedom £or the individual.

Also, essential to the democratic ideal is the right of the minority to the exercise of those freedoms which it must possess if it is to translate into policy and program the minority position.

It is in this context that the individual citizen operates and functions in a democracy. He commits himself to it; he involves himself in it, and he, at all times, evaluates it from the standpoint of the public, as well as the private good. Whether the citizen, in his evaluation of government sees good or evil will depend, of course, on his perspective.

We might reflect briefly upon the Greek concepts of Hubris and Sophrosyne, as we undertake to render a judgment upon the outcome of the governmental processes. Hubris, excessive pride and insolence, was regarded by the Greeks as sinful behavior. Sophrosyne, a personal life which exhibited self-restraint and intelligent recognition of the needs and requirements of the community, was regarded as virtuous behavior.

A problem confronting society today derives from the fact that there are those who, because of a lack of understanding of the real character of democracy, would through an excessive display of Hubris, or through an insolent disregard of the community interests, produce a condition of social chaos. A genuine possibility is that a condition of social anarchy may be brought on through an excessive assertion of selfish individualism. A problem of a different character and dimension is that other individuals, through an over-zealous pursuit of Sophrosyne, may encourage a subservience of the citizen to the society, or its personification in the state, and, as a consequence, introduce a form of totalitarianism into America.

On this point José Ortega y Gasset commented: “there will not be found amongst all representatives of the actual period, a single group whose attitude to life is not limited to believing that it has all the rights and none of the obligations. It is indifferent whether it disguises itself as reactionary or revolutionary; actively or passively, after one or two twists, its state of mind will consist, decisively, in ignoring all obligations, and in feeling itself, without the slightest notion of why, possessed of unlimited rights. Whatever be the substance which takes the position of such a soul, it will produce the same result, and will change it into a pretext for not conforming to any concrete purpose. If it appears as reactionary or anti-liberal it will be in order to affirm that the salvation of the state establishes a right to level down all other standards, and to man-handle one's neighbor but the same happens if it decides to act the revolutionary; the apparent enthusiasm for the manual worker, for the afflicted, for social justice, serves as a mask to facilitate the refusal of all obligations.”

In a free society the relation of subject and predicate, or citizen as agent and citizen as a recipient, are interesting. In the role of subject or agent the individual, to the degree that he is involved, influences the outcome of government, or its ultimate character. The citizen, if he is displeased with society as he interprets its goals and achievement, has an obligation to undertake to change it; this is not aright, it is the responsibility and obligation of all citizens in the free society. It is especially the obligation of the Christian, and especially of the educated citizen—for he must be involved if the ends of government are to prove worthy of its ideals. So, the citizen, in his role as activist or participant, can be and must be one of the many forces which determine the end result of government. The end product of government, of course, is the experience of the citizen in his passive role in which he is the principal object or recipient of the exercise of government power and authority. He is hardly justified in criticizing the condition of his fate as a recipient, or as an object of the ends of government, if he declines to exercise the role of citizen and refuses to assume his share of the responsibility for the determination of its ends and for the implementation of those ends.

The special obligation of the Christian flows from the fact that his life is ordered and constructed upon a religious foundation and reflects, if it is a worthy life, the ideals of that faith. We may infer from history, also, that the Christian ethics rest upon values which are traditionally related to the basic values of the free society, for example, (1) the emphasis placed upon the inner character of man, his motives, will and desires, (2) the importance to the Christian of the commandment of love, (3) the view that man is under obligation to God, which gives cosmic significance to his moral life, (4) the role of Christ as an inspiration to a life of idealism, and, finally, and very significant, Christianity's emphasis upon the absolute necessity of man's spiritual and moral growth—the view of man as an end and not as a means to an end.

This latter view of man, of course, is the absolute essence of the democratic ideal of society. Democracy affirms that man and the service of man is the end of government. It rejects the view that man is a servant of the state, and, as such, is a thing to be manipulated in order to serve ends other than those related to his own dignity and personal fulfillment.

The initial encounter of the citizen in his attempt to engage in politics is one of bewilderment and confusion. He does not know how to be effective and not infrequently an inadequate understanding of government leads to discouragement and eventually to disengagement. Usually, the sense of frustration experienced by the novice results from his over optimism. His unrealistic expectations produce a disappointing encounter. This can be avoided if the expectations of the first commitment are not too ambitious. It is important also that the neophyte learn how to make his effort reasonably effectual~ otherwise, a sense of inadequacy will fortify the sense of frustration and contribute to disillusionment and withdrawal.

There are essentially two ways to be involved in government: one, is as a citizen concerned with the public well being and the other is as a member of an interest group which is organized to advance a special objective. All of us are part of the public; all of us are members of one or more special interest groups.

If we desire an involvement or commitment aimed at a fuller expression of our membership in the community, we may proceed directly to partisan politics or to involvement in an idea group trying to influence government. If we wish to serve a personal, special interest, we may act as part of or through a special interest group—a business association, a religious organization, an employee group, or an employer group.

The widespread acceptance today of the “brokerage” theory of government, which visualizes government primarily as the reconciliation of selfish or special interests, presents a serious problem to a democratic society. Most citizens have a primary commitment to special interests and mild, almost indifferent, feeling toward the general interest. The compulsion experienced by many citizens, therefore, is the powerful urge to avoid partisan politics and to be involved almost completely and sometimes quite intensely in the cause of a particular and personal special interest.

The crux of our crisis in democracy today, therefore, is found, to a significant degree, in “the attitudes of individual citizens toward politics.” There seems to be an excessive preoccupation with personal affairs, which, in the words of De Tocqueville, “saps the virtues of public life,” and a too narrow involvement of the citizen in matters of public concern.

This condition encourages the “brokerage” concept or practice of government and tends to negate the prime requirement of democracy, which is that the citizen's role is to serve the interest of the public good.

If the Christian is to be involved in a meaningful way, he must share in the processes of government and be consciously active on the determination and advancement of the public good. This aspect of his civic life must be completely subordinate to his commitment to his selfish, business, professional or workingman's interest.

There are too many individuals who do not realize that the obligation of the citizen is one which requires a commitment and an involvement in the broad arena of political strife and controversy. This, therefore, is a cardinal weakness of the free society.

The issue before us, therefore, is not whether government is evil or good; the issue before us is the failure for the average man to realize that government is a primary responsibility of the citizen and, particularly, of the Christian citizen.

The role of an active citizen is not always easy. Registering and voting are time consuming, but that is about all, and this is the simplest and most direct way in which a citizen functions in the body politic. However, an involvement beyond this level, through active identification with a political party, involves more of a commitment, more of an effort, and more distress. Such an involvement places the individual in a role which produces an experience unknown to those associated with the church, with a special interest group, with civic activities, or even with non-partisan politics. Such an involvement provides an automatic encounter with controversy and conflict; it is sometimes exhilarating, but, as I have suggested, it is more often disillusioning. However, the principal difficulty encountered in personal involvement is not in becoming accustomed to confusion, to conflict, or the intrusion of politics into one's private life; it is rather in finding a modus operandi within a pluralistic society, embracing many special interest groups, for the effective implementation of one's essential moral convictions and, at the same time, preserving and safeguarding the institutions and processes which collectively make up the democratic way of life.

One immediately finds, when one is involved in partisan politics, that controversy is immediate, often intense, and tremendously disruptive. Often, unfortunately, it becomes quite personal. Success requires, therefore, that one view dispassionately the arena of politics when committed to it and learn, as President Johnson observed, “to disagree without being disagreeable,” and, thus, insure that a conflict of ideals does not become translated into a conflict of personalities or even destructive militancy.

Perhaps, the greatest danger of the moralist in politics is his tendency toward dogmatism—his inclination to take a black and white view on political issues, to see government as right or wrong, rather than good or bad. This propensity of the moralist produces a compulsion to become dogmatic and doctrinaire. It seriously handicaps one's ability to function effectively in an area where the preservation of relations cordial to the continuation of a dialogue is essential. Failure to exercise restraint in the context of active political involvement can produce a miasma or political sickness totally destructive of the spirit and institutions of the open society.

The fundamentalist religions, in particular, have trouble when politically committed. Absolute in the beliefs about their religion and the essential truths of their doctrine, they are unable to admit the view that society should tolerate an opposite view or to allow it to be advocated. Censorship—an appeal to the state—is the bulwark upon which they often rest their case and in so doing they advocate a course of action which, if pursued relentlessly, possesses an inherent potential for producing the final death of the free society, which of necessity must be pluralistic. Fundamentalists experience a difficulty in accepting or tolerating conditions which from their perspective are goalless, immoral and, therefore, sinful.

The truths revealed to them in their view are the ones which should be made the “established truth.” They fail to realize that in a non-democratic, non-pluralistic society, error, either of the majority or the minority, might or rather are generally permanently enthroned as “established truth.”

The Christian must, therefore, continuously remind himself that politics is not a black or white situation—especially in a free society. It is majority rule expressed with proper regard for the minority and with the guarantee of an opportunity for the minority to translate its view into a majority position. The Christian must rekindle the eternal hope that the prevailing majorities will reflect moral principles; since a society without ideals cannot achieve its true worth any more than can an individual.

Rigid adherence to the Christian ethic often generates in the believer a quality of absoluteness which also generates problems for the Christian who vigorously seeks to make that ethic viable and universal. It brings him into direct confrontation with the necessity of achieving a reconciliation between this commandment and the issues of war and peace, capital punishment, racial discrimination, social justice, and public and private morality.

The practical requirements of political life obviously produce a dichotomy or dual standard which is essentially a compromise and usually disturbing and unsatisfying to Christians. Some respond by withdrawal, even from society, and others from political life—taking the position that they can have no commitment to a political entity based upon values they reject or as operating amorally or without values. Others accept the anomaly and rationalize it—usually with the view that the democratic society through their involvement may create a morality, if it has none, or develop one more congenial to Christian idealism, if it is totally secular and materialistic. It is their hope, of course, that the separation of the spiritual and temporal power will then become less distinct and both the individual and society will be benefited.

At all times we must remember that American government is not based upon an ideology—that it tends to be non-ideological and that it is basically pragmatic. It deals with problems as they develop on a practical basis. If it has an ideology—and I doubt it appropriate to use the term in such a manner—the ideology is the concept and practice of majority rule and respect for the dissenting view of the minority. From its pluralism has come, therefore, a consensus which is an adjustment to practical problems, not an implementation of a particular ideology. In its concept and practice, the state is not given the role of protector of any orthodoxy or doctrine, whether of statism, Protestantism, atheism, communism, or racism. Its role is to preserve an opportunity for the people to develop a consensus which will produce the good life—justice to all men and respect for the dignity of man—clearly essential elements of the Christian ethics.

A corollary rule is that if there is a determination to proscribe by law a form of behavior because it is regarded as contrary to the moral precepts of Christianity or of a particular interpretation of Christian moral values, it should be established, prior to its enactment, that any such legislative proscription serves the public good by preventing a social evil and that it is not merely a prohibition of personal freedom, even if judged essential to the individual's well being. This is, it seems to me a basic principle to be recognized and observed by those citizens of an “open or free society” who understand its essential character—its pluralism.

The “closed society” can, of course, impose its will on the individual for his own good or for the good of the secular theology. In fact, it is not only appropriate to the ideology of such a society, but essential for its survival.

Conclusions

It would seem to me that the Christian, as an individual and as a member of a Christian fellowship, must have a special obligation to participate in politics. But, in so doing, he must be aware of the metes and bounds or the context within which his political involvement will of necessity place him. He must understand the open or democratic society; its pluralistic character; its ends and goals; its ideology and moral assumptions; and its peculiarities of structure and organization.

He must avoid being doctrinaire about his peculiar morality; he must accept the majority rule; protect the right of dissent; reconcile himself to the view that the immorality of the community—or even its amorality should be corrected by education and precept in preference to legislation. If society errs, he must remember that it is better to err and be free to change than to err permanently, once and forever.

He should remember the admonition of Michah in the Old Testament:

“Seek justice; love mercy and walk humbly in the presence of God.”

He should prefer to “light a candle than curse the darkness.”