Rigonomics:

I received a lot of comments and calls about last week’s column (“Things look bad for California,” Rigonomics, Sept. 5).

Some thought I was being too negative. Believe me, it is a lot more fun doing happy stories. I have always been a “cup half full” kind of guy.

My closest business partners will tell you that in the face of calamity, I always put a positive spin on things to the point that they think I see the world with rose-colored glasses.

The fact is, these are not happy times, and the public will remember 2009 as the summer of discontent.

Recently, the Public Policy Institute of California released the results of its 101st statewide survey of 2,000 California residents that backed up those feelings. These are serious times, and Californians are starting to get more serious.

When times are good, the public does not have to worry about what is happening in Sacramento or their own city. So they don’t. When times get bad, every action gets close scrutiny.

The problem with this on-again, off-again input from the public is that the bad decisions are made in the good times when no one is looking.

The laws to pay exorbitant pensions to public employees were passed when the economy was good and the stock market high. Who cares if you give public employees 90% pensions at 50 years of age when the state retirement fund is over-funded with bubble-priced tech stocks? Not wanting to upset the public safety unions, most Republican legislators also went along.

Now, of course, when the tech bubble burst and tech stocks crashed, the pensions were underfunded by billions. Republicans pounded their chests and said how reckless the tax-and-spend Democrats were to allow these outrageous pensions.

So what did the poll tell us? Of those polled, 67% say the state can expect bad times financially for the next 12 months. With California unemployment higher than most of the country, getting close to post-Depression highs, it is easy to see why they felt that way. Almost 50% were concerned that they or someone in their family would be out of a job in the next year.

Though a whopping 96% said the state budget was a problem, they seem conflicted on how to solve it. Sixty-five percent want a law for a strict spending cap to limit increases on state spending, while a majority (53%) think they should lower the threshold to pass a budget to 55% from two thirds. In addition, 50% thought local taxes should also be able to be raised by a 55% vote of the people instead of the two thirds needed now.

In a state with some of the highest tax rates in the country, it’s hard to believe the public would want to raise taxes. When you look at the numbers more closely, you find — not surprisingly — that people do not mind raising taxes as long as they do not have to pay them.

To see what that gets you, look back to 2004, when Californians voted for Prop 63, the 1% millionaire tax to fund Mental Health Services.

The public thought, how big of a deal would it be to raise taxes a measly 1% on a millionaire? As it turns out, a lot. In 2007, Los Angeles County lost 7,000 millionaire households, when, during the same period, Maricopa County in Arizona, with a much smaller population, gained 23,000 new millionaire families.

We may have gotten an additional 1% on the millionaires who stayed, but we lost 10.9% on those who left — taking with them not only the taxes they paid, but also the jobs those high incomes kept employed.

So here is the good news: The public is awake and ready to do whatever it takes to get this state back on track. According to the poll, 56% say that decisions made through the initiative process are better than those passed by the legislature and signed by the governor.

I expect to see this in action starting in the June primaries. Citizen direct government will be in full gear with at least a half dozen citizen-led measures on the ballot. Initiatives go the full range from a part-time legislature to 50% pay cuts for legislators. Any type of pension reform or spending cap initiative would pass easily.

These are serious times, and the public is serious. I will keep you informed as the initiatives move forward. I think I see the light at the end of the tunnel.

JIM RIGHEIMER is a Costa Mesa Planning Commissioner, local business owner and a father of four. He can be reached at jim@rigonomics.com.