The all-too-common perception that governments in California have been financially strangled by Proposition 13 is incorrect.

Just before Proposition 13 was approved by the voters in June of 1978, the state government and all the local governments in California were spending about $38.2 billion a year. This $38.2 billion represented about 17.8 percent of the total personal income of all California residents in the 12 months preceding the voters' approval of Proposition 13.

By 1995 (the most recent year for which accurate data are available) total state and local government spending had increased to $145.9 billion. This represented about 19.1 percent of the total personal income of all California residents in 1995.

State government and all the local governments in California are now spending a greater percentage of the personal income of all Californians (19.1) than was the case in the year preceding the voters' approval of Proposition 13, when the state government and all local governments actually spent a smaller percentage (17.8) of the personal income of all Californians.

Measuring state and local government expenditures as a percentage of total personal income is a useful way of analyzing the relative size of government for many reasons, but especially so for three main reasons. First the total personal income of all Californians represents the ability of Californians to buy food, clothing, shelter and other necessities, and to save for education and retirement, as well as to pay for government.

Second, the amount of government spending as a percentage of total personal income in one year can readily be compared to another year. This sort of comparison gives a clear, unambiguous picture of the relative size of government in any two (or more) years.

Third, and perhaps most important, examining the size of state and local government expenditures gives a true and complete measure of the size of such government activity. Some taxes might increase rapidly, or not so rapidly, "fees," "charges," and "assessments" might proliferate, "service charges" can be siphoned off to support bureaucratic staff rather than provide a particular service, "enterprise funds" can be established; in short, there are many ways to take money from the taxpaying public. Measuring state and local government expenditures captures the total net size of these governments in California.

While total state and local government expenditures as a percentage of total personal income increased from 1978 to 1995, the composition of these expenditures varied. Net state government spending increased from 3.6 percent to 3.7 percent of total personal income. Total county expenditures (there are 58 counties in California) increased from 3.9 percent to 4.5 percent of total personal income. Total city expenditures (there are close to 500 cities in California) increased from 3.6 percent to 3.9 percent of total personal income. Total Special District expenditures (there are over 4,500 special districts in California) increased from 1.5 percent to 2.3 percent of total personal income. Public school (K-12) district spending (there are over 900 K-12 public school districts) decreased from 4.2 percent to 3.8 percent of total personal income. Total community college expenditures decreased from .7 percent to .5 percent of total personal income. Total redevelopment Agency expenditures increased from .26 percent to .43 percent of total personal income.

One last area that warrants attention is the growth in the California Public Employees' Retirement System (CalPERS). Annual revenues of CalPERS have grown from 2.5 percent of total personal income in 1980 to about 4.1 percent in 1995.

In sum, state and local government has grown, in both absolute and relative terms, since Proposition 13 was approved by the voters.