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THE STATE | THE RECALL CAMPAIGN

Campaign Watch

Analysis of Republican candidates' statements

September 25, 2003

Topic: California and the federal government

Candidate: Arnold Schwarzenegger

Statement: California gets back only 81 cents on every dollar of taxes that state residents pay to the federal government.

Analysis: Mostly true. Many federal programs are designed to spend more money in poor states, such as Mississippi or Arkansas, than in wealthy ones like California and New York. States with large numbers of wealthy residents typically send more money to Washington than they get back. The exact amount varies from year to year. According to the California Institute for Federal Policy Research, the percentage of federal tax payments from California that came back to the state hit a low point in 2002 -- at the peak of state tax collections -- of 77 cents on the dollar. According to the Tax Foundation, a nonpartisan group based in Washington, D.C., California ranks 45th among states in balance of payments. The biggest winner, New Mexico, has a relatively small population and large federal expenditures at the Los Alamos National Laboratory. New Jersey ranked lowest, receiving just 62 cents for each dollar paid in.

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Topic: State spending

Candidate: Tom McClintock

Statement: "We're spending more than twice per capita in inflation-adjusted dollars than what Pat Brown spent more than a generation ago when we were building highways faster than Detroit was building autos, we had the finest public school system in the country, we had one of the finest university systems in the world, we were building the State Water Project."

Analysis: Factually correct, but possibly misleading. Using historical data published by the Department of Finance, McClintock divides total state spending by population and adjusts for inflation. But his analysis leaves out several important factors. The biggest is that McClintock restricts his analysis to state spending only, not the combination of spending by state and local governments. That is important because after Proposition 13, which lowered property taxes, a large amount of local government spending was shifted to the state. The overall size of government did not increase as a result, but state spending did. The Tax Foundation tracks combined state and local spending as a percentage of income. Its records show that California's overall tax burden peaked in 1977, the year before Proposition 13 passed. It then dropped sharply over the next two years and has yet to regain the 1977 level despite the rise in spending during the 1990s.

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Compiled by Times staff

Los Angeles Times

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