Last July—after weeks of failing to get his $103 billion state budget approved—California Gov. Arnold Schwarzenegger called his legislative opponents “girly men” at a shopping mall rally in Ontario, Calif.
It may have been tongue-in-cheek, but the remark created a furor as many Democrats, women and gay men took offense. Meanwhile, the woman whose work helped trigger the budget stalemate was unfazed. In the heated climate of California budget wars, this was business as usual for Liz Hill.
Hill, ’73, is the state’s legislative analyst, a nonpartisan watchdog who follows taxpayers’ money and makes sure it’s spent wisely. It’s a gigantic task. California’s economy is the sixth largest in the world, and its deficit in 2004—estimated at more than $8 billion—is larger than many states’ budgets.
Hill is the bane of governors and legislators she finds fiscally imprudent. In her 28 years with the state Legislative Analyst’s Office (LAO), she has skewered both Democratic and Republican proposals on how to divvy up California’s annual budget, now a $100 billion behemoth.
Recently, California has been hammered by runaway energy prices and the dot-com bust. In a speech last year in Los Angeles, Hill noted that the state’s biggest source of revenue, personal income taxes, dropped 26 percent in 2001-2002 alone “and we haven’t really recovered from that.”
Nearly every summer, Hill, who joined the LAO in 1976 and became boss in 1986, finds herself in the middle of a political death match over California’s budget. The governor submits a proposal, Hill weighs in, lawmakers take the governor’s proposal apart, Hill weighs in again, and then both sides skirmish for weeks into the new fiscal year, putting programs in limbo.
Her 52-person staff of economics professors, lawyers, teachers, ex-journalists and ex-cops examines everything from charter schools to health care to water privatization. They produce a 1,000-page budget analysis and hand-deliver a 200-page version of it to each of the state’s 120 legislators. Hill reads and signs off on every word in the unabridged version. “We look at how the economy’s doing, what’s going on with revenues, do the governor’s proposals really pencil out,” Hill says. She emphasizes that her office merely makes recommendations to her 120 “bosses” in the legislature to use or discard as they wish. But the legislators take those recommendations very seriously.
In January, Hill gave Schwarzenegger’s original budget plan a fairly clean bill of health, declaring that it included “realistic revenue and caseload assumptions,” although she suggested the legislature consider a tax increase to plug a $6 billion deficit projected for 2005.
However, she criticized the governor’s plan after he submitted a revised budget that relied on $2.6 billion over the next two years taken from city and county coffers.
The LAO report charged that the governor’s revised proposal lacked overall policy coherence, provided only “short-term relief” and in the short run imposed added fiscal stress on many local governments, including possible cuts in services.
“The piece literally holding up the budget was the local government piece,” says Assemblyman Darrell Steinberg, D-Sacramento, a chief opponent of Schwarzenegger’s proposed budget. Hill, he says, “armed us, as the legislature, with the data and the arguments to be able to debate a very important issue . . . that has a lot to do with how we grow.”
Steinberg calls Hill “one of the great treasures of our state because she calls it as she see it—she is not burdened with the curse of the legislature, which is to look only at the short-term impacts of getting something done.”
Schwarzenegger’s deputy finance director, H.D. Palmer, takes issue with critics who charge that the governor’s “mañana budget” buys now while taxpayers pay later. He said Schwarzenegger plans to streamline state government and reform the state’s MediCal system, and that the current budget does not reflect those savings.
Says Palmer, “If you talk to both Republican and Democratic leaders, there’s widespread respect for Liz. I can tell you first-hand that Liz is firmly committed to achieving savings in state government because I have run into her shopping at Costco on a Friday night.”
Not all greet Hill’s work cheerfully.
Former assemblyman and San Francisco mayor Willie Brown, who pretty much ruled the legislature from the early ’70s to the mid-1990s, “hated the analyst’s office,” recalls Sacramento Bee political columnist Dan Walters. “He created his own shadow analyst’s staff” to try and blunt the LAO’s findings.
Hill allows that with 120 bosses, “someone is usually upset with us at any given time . . . you can’t take that personally.”
Her husband, Larry Hill, says that the hotter things get, the cooler she is: “If we’re having a lover’s spat, she actually gets more articulate.” He says the same thing happens when legislators try to intimidate her: “She gets better. She doesn’t raise her voice in the Senate chambers.”
Hill has left a trail of broken budget dreams and sliced away a mountain of governmental lard. Some examples:
- Gov. Jerry Brown once proposed a budget that called for California to launch its own satellite. The LAO said it wouldn’t fly fiscally.
- In 1978, Hill recommended that the state Department of Justice no longer give its employees state cars to drive. The employees, many of them attorneys, said they needed the cars at home in case of emergencies. But Hill found the cars were never used in emergencies. The legislature cut $500,000 from the DOJ’s budget and made the employees drive their own cars.
Nothing is too arcane for Hill’s sleuths. Last year, when California was considering issuing driver’s licenses to as many as 2 million undocumented immigrant workers, she sent analyst Paul Steenhausen to wait in line at 10 DMV offices in California. Steenhausen, who sometimes went in undercover in blue jeans, found the average wait was 80 minutes, and some customers were waiting four hours.
In response, the governor ordered the DMV to hire 400 more staff, reducing the average line to half an hour.
Hill’s upbringing proved the perfect incubator for her unflappable bipartisanship. Her mom, a third-grade teacher, was a Republican; her dad, a salt salesman, was a Democrat. She was student body president and valedictorian at Thomas Downey High in Modesto, Calif.
She spent a year between high school and college near the Arctic Circle, where she went to school and lived with a Swedish family, and later won a Fulbright scholarship to study Sweden’s transportation system.
At Stanford, she played guard on the basketball team and majored in human biology.
Hill, who got her master’s in public policy at UC-Berkeley, once joked that her cross-Bay education added to her bipartisan credentials. “First you to go to Stanford, then you go to Cal.” And when Big Game rolls around? “You sit on the 50-yard-line.”
Steve Magagnini, a John S. Knight fellow at Stanford in 2001-2002, writes for the Sacramento Bee.
