The Federalist Voter: The Tale of Education Finance Reform in California

Abstract

The literature on direct democracy presents a false assumption that its institutions create good governance. A study on education finance reform in California (1978-2012) illustrates the paucity of support for the literatures principle assertion. This research shows that voter determined fiscal policy through the passage of tax limiting and education finance reform measures has not only crippled the California budget but has also reduced the quality of public education. The externalities caused by state and municipal level fiscal tribulations has also altered the balance of power in California in regards to the responsibility over education finance. While education finance before 1978 was largely a local matter, feedback effects caused by voter trends in supporting lower taxes and increased state obligations to support education has centralized the state role by controlling the means of governing expenditures. The minimum obligations to be spent on education has further diminished the ability of the state government to fund all obligations, including education which was the intended recipient. These feedback effects that have continued to limit the ability of state and local governments to meet their basic obligation have increased reliance on federal block grants and direct to local funding. This research concludes that while voters do not vote with the federal system in mind, the results of their actions nevertheless increase the federal governments encroachment into the state and local domains of education.