An Empirical Analysis of California Budget Gridlock

Abstract

AbstractCalifornia is notorious for its budget gridlock. From 1950 to 2008, the budget was adopted late 44% of the time. Although short delays have few consequences, delays in passage have become longer in the last two decades, leading to more severe consequences, such as a lower credit rating and higher borrowing costs. The purpose of this article is to systematically analyze late adoptions of the state budget. I examine annual data from 1901 to 2008 and conduct regression analysis of the length of budget delays, controlling for economic conditions. This study reveals that political and economic conditions, tax policy, and voter-passed initiatives all prolong delays. Interestingly, election years do not reduce budget gridlock despite the potential electoral pressure on the governor and legislature to reach a compromise. I conclude by discussing the study's implications for investigations of budget gridlock in other states and at the national level.