Analyst Hill talks about inequalities in economy

By Michael Falcone

Daily Bruin Contributor

State Legislative Analyst Elizabeth Hill does not claim to be
psychic, but California’s elected officials look into her
crystal ball when they want to know the future of fiscal and policy
issues affecting the state.

Hill, who gave the annual Bollens-Ries Lecture at the Faculty
Center on Wednesday, said that even though she and her senior
colleagues at the Legislative Analyst’s office have an
average of 20 years experience under their belts, their predictions
are not always perfect.

“You know in forecasting you are going to be wrong some of
the time,” Hill said. “But you can hope that at least
you are going in the right direction.”

In its 16th year, the Bollens-Ries lecture series ““ named
in memory of UCLA political science professors John C. Bollens and
John C. Ries ““ seeks to bridge the gap between academia and
politics.

Hill recognized members of both professors’ families who
were guests at Wednesday’s lecture.

Hill is at the helm of the state’s only non-partisan
fiscal oversight organization, which is charged with reviewing and
analyzing the finances and operations of state government and
legislative initiatives.

In the past the office stuck to number crunching, but Hill said
that with the introduction of legislative term limits, the
LAO’s role has changed.

“There has been a trend more recently on the part of the
LAO to suggest more specific policy options than they have in the
past,” Hill said.

In November, she said, even if all of the incumbents who are
seeking reelection to the State Assembly win, she will still end up
knocking on the doors of more than 30 rookie legislators who have
no institutional memory of the way government and programs
work.

According to UCLA Vice Chancellor Steven Olsen, who introduced
Hill on Wednesday, she has been in Sacramento long enough to know
the ins and outs of the state bureaucracy better than most.

Olsen, who first met Hill when he was a graduate student at UC
Berkeley, described her as “exacting, probing, insightful and
relentless.”

“In 1994 she unearthed a large and incredibly embarrassing
error in the Department of Finance budget,” said Olsen, who
is vice chancellor of finance and budget. “Had it not been
detected that error would have plunged California into fiscal
chaos.”

Six years later, California is experiencing anything but fiscal
chaos, and on Wednesday, Hill announced that California’s
economy has grown by more than 20 percent from last year.

“The last time we have seen 20 percent revenue growth was
in the 1970s,” Hill said.

“To have 20 percent growth at a time when the California
economy is doing so well is, frankly, phenomenal,” she
continued.

The LAO originally projected revenue growth figures of 8
percent, but the higher revised estimate gives law-makers the
resources to do more, Hill said.

As the elected official with the strongest grip on the
government’s purse strings, Gov. Gray Davis, will have the
greatest influence on how the money gets spent, Hill said.

She declined to give a specific answer when asked what letter
grade she would give Davis for his performance so far, but she did
say that the higher-than-expected revenue increases warrant some
decisions on his part.

“The governor is definitely taking a go-slow approach, not
just in terms of public policy, but also in filling
positions,” Hill said.

“I think the governor is right to be concerned, but the
numbers are so strong ““ he’s going to have to make a
proposal on what to do with this type of money,” she
added.

Though the surplus money comes at a time when California is
experiencing a relatively healthy economy overall, various policy
problems persist throughout the state. One of the most significant,
according to Hill, are housing prices that far exceed the national
average.

Hill cited a recent New York Times article, which reported that
some people in Silicon Valley are opting to ride around on a
24-hour bus all night because they cannot afford housing in the
high-cost areas near where they work.

“Thirty-four percent of the homeless population in Santa
Clara County have full-time jobs,” Hill said. “Clearly
the state has a major problem in terms of housing
affordability.”

According to LAO data, housing is not the only major problem
facing California. A widening gap between the rich and poor and the
fact that California is home to one-sixth of the nation’s
uninsured are also policy challenges that need to be addressed.

“I was startled by both the size of the budget surplus and
the inequality,” said Ronald Rogowski, chair of the Political
Science Department.

Rogowski pointed out that while Davis has done some “bold
things” with transportation, especially in the Los Angeles
area, the governor is lagging in other areas.

Hill said the time is right to tackle some of the policy
problems that the government has been unable to address in the
past. With more money, she said, comes the incentive and ability to
act.

“It’s a great moment of opportunity,” she
said.