Why California’s Government Isn’t Working

While voters were sticking a knife in the oligarchy across the country this year, that particular aspect of the blue tsunami ended at the border of California.

Proposition 40, the billionaire wealth tax, failed. Worse, the competing initiative placed on the ballot to confuse voters, Prop 42, could very well pass. (It’s up by about 580,000 votes, but there are nearly five million left to count; the no side would need something like 56 percent of the uncounted vote to win.) Prop 42 bans all taxes on personal property and assets and is an almost direct copy of something that Texas passed three years ago. While it was sold as protecting retirement accounts and exempts real estate taxes, an enterprising lawyer could certainly try to use it to nullify the state’s vehicle registration fees (which certainly can be construed as a tax on personal property) or business equipment taxes, further adding to the series of fiscal straitjackets California has imposed on itself over the years.

And incredibly, the statewide ballot measure that is most emblematic of California’s political and policy failure, and the selling of the state to the highest bidder, is a different one.

Prop 38 sounded straightforward enough: a bond measure for immunology research, pitched as a fill-in for the Trump administration’s cuts to basic science. Sounds great, until you learn that one billionaire named Gary K. Michelson wrote the measure, funded it, and runs the California Institute for Immunology and Immunotherapy, which is the only entity eligible under the initiative for $4.2 billion in bond funds. So it was literally a ballot measure put on by a billionaire to pay himself.

The institute currently has three employees despite promising to hire 51 last year; it certainly looks and feels like state voters were being asked to finance a bust-out. And it is currently leading 55-45; unless a substantial number of votes swing against Michelson at the last minute, he’s going to get his money.

I don’t have to stop there. Xavier Becerra, a sentient vessel for corporate cash in a decent-fitting suit, will become the state’s next governor. I went to a get-out-the-vote rally on the Sunday before the election at the Hollywood Palladium, and there was a VIP balcony there; the campaign said it was for former elected officials and “people who have supported Becerra.”

When Becerra, in his first post-election press conference, was asked by what is left of the state press corps exactly how he’s going to save the state from the Trump administration’s $100 billion in cuts to health care, a problem Prop 40 would have solved and a question never asked of anyone opposing Prop 40 during the entire campaign, Becerra insisted defiantly that he would not commit to a solution to the biggest near-term problem facing the state.

It’s hard to even remember that California was once a national model: a place that had world-class higher education at virtually no cost for in-state residents, a place that passed laws that started here and migrated to the rest of the country. That has become overwhelmed by special-interest money, a rotten Democratic Party, and a public that is, unfortunately, distracted and easily tricked. It is a hideous state of affairs and it’s hard to imagine a way out.

There’s a simple reason for why voters in an anti-oligarchic mood didn’t pass a wealth tax so modest that the 250 mega-rich households affected would have made it back entirely within 31 days. Or rather, there were 597 million identical reasons. That’s how many dollars were spent on opposition to Prop 40 and boosting of the poison pills, Props 41 and 42, that would have nullified it. It’s an old story in California’s failed experiment with direct democracy; if you have the cash, you win.

But the reason money is such a determining factor here is that there’s no organization other than money that has the interest or respect of the public. The Democratic Party was badly split on Prop 40, with its executive board voting to endorse it while its current and future governor opposed it. Even organized labor, which honestly stands in for the party when it comes to voter engagement, was not fully on board, with non-health-care unions selfishly grousing that they wouldn’t get enough of a cut of the wealth tax proceeds.

The California Teachers Association opposed Prop 40 because it wanted attention focused on Prop 3, a permanent extension of the existing tax on millionaires that saved the state budget in 2010. (It passed resoundingly.) That year, the CTA used California Calls, a statewide voter contact program for low-income households, which not only helped pass the millionaire tax but earned Democrats a supermajority in the legislature. California Calls was not deployed for Prop 40, and it lost.

Then, of course, California’s budget is in a perpetual state of semi-crisis because of various anti-tax ballot initiatives, above all the property tax cap in Prop 13, which state progressives have repeatedly tried and failed to remove.

The contrast with Colorado is instructive. That state also had a measure on the ballot to increase taxes on high-earners, Amendment 87. It also had a poison pill companion, Prop 136, that would have capped the current income tax rate. It also faced millions of dollars in opposition, though not at quite the same level as Prop 40 in California. And it was opposed by the state’s outgoing and incoming Democratic governors, Jared Polis and Phil Weiser, respectively. And yet Amendment 87 still won, and the poison pill lost, thanks to ground organizing and getting the word out.

This seems like a nearly impossible circumstance in California. Uber and Lyft bought their own labor laws at the ballot several years ago. In 2024, California became the first state to lose a minimum-wage increase at the ballot in nearly 30 years, despite an 11-1 cash advantage. And now Prop 40 has failed.

People will die as a result. It’s rude to say that, and nobody bothered to try during the campaign. But $100 billion in anticipated health care cuts over five years translates into more people losing Medicaid coverage, more hospitals closing, and more residents struggling to access health services, and all that means worse response times in emergencies, more deferral of preventive care, and eventually more death. That’s just reality. Nobody on the anti-tax side even bothers to offer an alternative course, and indeed they get mad at you for daring to ask the question.

California’s money-controlled ballot disaster is an extension of the lobbyist-owned state capitol in Sacramento. There are many hardworking and well-meaning people in state government, but in general they are overwhelmed by a political leadership that is in hock to big money and a small clique of consultants. Bearstar Strategies, the same big-name consultant that advises Uber and the soda industry, will now run its third straight governorship, having worked with Jerry Brown and Gavin Newsom along with Kamala Harris and Alex Padilla. They lined up behind the disgraced Eric Swalwell until the rumors of his sexual misconduct could not be covered up; then they all genie-blinked like nothing happened to Becerra, whose past relationship with Bearstar yielded a federal corruption investigation and two guilty pleas.

The legislative disappointments have piled up, and accelerated with Gavin Newsom in office. Since 1997, the state Chamber of Commerce has identified “job killer” bills, and that identification is enough to kill 80 percent of them. Good things do still happen sometimes, but often without follow-through: California passed a bill to manufacture its own insulin in 2020 and it hasn’t gotten more than one product to market yet, and that’s lightning-fast compared to high-speed rail. The epic choke on the Paramount merger showed that nobody cocooned in the political establishment can be trusted to take on anyone with power.

The reasons why are legion: The state has virtually no political media, and even among political junkies there’s a lack of interest in state politics compared to being a political ATM for would-be presidential candidates. Opinion leaders on state issues are scarce and, with a self-exiled GOP and little political competition, most of the public is clueless. As a result, the rich can all but buy policy outcomes over the table. Bad outcomes are easily predictable.

Is there a way back? There are some interesting people in state government, from former Consumer Financial Protection Director Rohit Chopra at the Business and Consumer Services Agency to newly elected Insurance Commissioner Jane Kim. The biggest victory this year could be Nithya Raman’s win for mayor of Los Angeles, not necessarily because of anything Raman might do, but because Karen Bass became the first member of the state’s political leadership in a long time to actually get fired for doing a bad job. It shows that accountability is possible, and the status quo can be beaten.

It’ll be difficult to take this statewide. The Working Families Party, which Kim led as executive director, is the kind of organization that can lead the way. But there’s the problem of the ballot, which has been wholly co-opted by the powerful and no longer serves its intended purpose. The problem is that voters like direct democracy in theory and will resist any efforts to weaken it, as they did at the ballot this year. And so much of California’s structural issues, the biggest being Prop 13, passed at the ballot and can only be changed at the ballot.

Here is my modest proposal. In addition to 14 statewide ballot measures this year, I had to wade through nine at the county and two at the city level. That’s 25 discrete decisions that required research and decision-making. I and my fellow citizens should be paid for being a part-time legislature. I propose $10 a ballot measure, paid by whoever put the initiative on the ballot. This would set table stakes for a “citizen” initiative at $230 million, given our 23 million registered voters.

The entire cottage industry of consultants and signature-gathering companies and wealthy interests who like to purchase democracy would be against me, but if I tried to qualify my $10 a ballot measure ballot measure, it would get like 90 percent support. And that would be the functional end of ballot measures, and maybe the beginning of a California run by the people through representatives it sends to do their bidding.