Taxes pay government to lobby itself

The Sacramento Bee , March 13, 2010

California has the largest state economy, and the state Capitol jostles with players seeking a piece of the action. The biggest single lobbyist, however, is not Wal-Mart, Apple, Toyota, the entertainment industry or some fat-cat Jack Abramoff figure. The biggest lobbyist is government itself.

In 2009, government-to-government lobbying in California totaled $50.1 million, representing 18.3 percent of the total. According to this figure, derived from official state sources, government-to-government lobbying is the single largest category of lobbying in the Golden State.

This activity imposes costs on society but for too long has gone largely unnoticed.

The state of California, like most jurisdictions, categorizes lobbying by sector. Much of the lobbying is undertaken by private-sector companies in finance, health care, energy, and real estate. On the taxpayer-funded side, the players include county and city governments, from San Diego to Susanville. They also include state agencies and the many state commissions, from the powerful California Coastal Commission all the way to the California Sea Urchin Commission.

Public education, California’s biggest budget item, is one of the major players in government lobbying, with massive entities such as the Los Angeles Unified School District, the community college districts and the county offices of education. Public-sector unions also qualify and, like school districts, lobby state government extensively.

Such tax-funded activity accounts for nearly one out of every four dollars of lobbying, an astonishing amount. The taxpayers who provide the funding, and whose interests may not be the same, have good reason to care about the rather stark differences between the two kinds of lobbying.

First, lobbyists in the private sector pay for their lobbying activity out of their own pockets. Second, private-sector lobbying is disciplined by competition. That is, there are almost always opposing private-sector interests engaged in lobbying that temper one another. For example, commodity producers often lobby for subsidies and protection while the users of the commodities lobby for the exact opposite. This competition between interests results in discipline.

Third, private-sector firms have limited resources with which to lobby and they have to show their owners or members results for their efforts. On the other side, things are different. When government agencies lobby the state, they pay for such activity out of the pockets of California taxpayers. Those resources are not subject to the same limitations as in the private sector. Very little if any competition exists on the government side.

In California, this activity shows no signs of slowing down and could use some discipline. Thankfully, the secretary of state’s Web site provides valuable information. The latest full year of available data (2009) indicates that $273.4 million was spent in California lobbying. This is a slight decrease from the $282.7 million spent in 2008, although 2008 was an election year.

The key to discipline of taxpayer-funded lobbying is transparency, which leads to greater public awareness and accountability. Transparency begins with requiring disclosure of lobbying activities. In an analysis of 37 types of lobbying disclosure across the 50 states, California ranked 20th with a score of 23 out of 37 (62 percent). That leaves much room for improvement.

California should require more and better disclosure of lobbying information, with a single standard of disclosure for all types of lobbying.

A double standard is unacceptable, though one can argue that government lobbying deserves more scrutiny, not less.

The second step is ensuring that the data are easily accessible for interested parties. An analysis of the 50 states concluded that California had the 13th-best system for accessing lobbying disclosure data.

California’s actual score, however, was a dismal 50.9 percent.

California faces deficits in the range of $20 billion for the foreseeable future. Government spending fuels that deficit, much of it driven by lobbying on the part of taxpayer-funded groups that have a vested interest in the expansion of government. All Californians have an interest in getting spending under control and restoring the state’s fiscal health. The key first step is better transparency of lobbying activity.

© Copyright The Sacramento Bee. All rights reserved.

Jason Clemens is director of research and Lloyd Billingsley is editorial director at the Pacific Research Institute, a nonprofit that champions freemarket policy solutions.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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