The claim that California's state government is too big and too expensive fails to explain the state's budget deficit, according to Robert Smiley, dean of the Graduate School of Management at UC Davis. "In comparing the number of state employees per thousand residents the results show that state employment has actually been decreasing since 1976," says Smiley. California now ranks 49th out of 50 states, with only Pennsylvania lower, in state employees per 1,000 residents. The cause of some of the deficit problem, notes Smiley, has been the shrinking tax dollar. But it's not just Proposition 13 that reduced the state tax revenues. During the past two years the recession has taken its toll on California. Since May 1990, California has lost 800,000 jobs -- equivalent to 6 percent of the state total payroll, according to the dean. To make matters worse, California now has a disproportionate number of young and old compared to workers paying taxes.