In 1978, the good voters of California passed a ballot initiative called Proposition 13. The measure put strict limits on property tax increases and sparked the national tax revolt we’re still coming to terms with 34 years later. One of the toxic ripple effects of Prop 13 has been to steadily push the once-proud California public-school system into the dumps. California now ranks 43 in per-student education spending and consistently hovers near the bottom in performance.
The funding gap created by Prop 13 has never been adequately filled, in large part because of the state’s cancerous budget process, which requires a notoriously fractured, grandstanding and special-interest-beholden Legislature to come up with a two-thirds majority for increase of any state tax rates. The result is ballooning deficits, declining services and abominations such as the 2012-13 budget, which will trigger about $6 billion in cuts, mostly to education, if one of two propositions on November’s ballot doesn’t pass.
Now, Propositions 30 and 38 propose modest tax increases aimed at staving off these cuts and funding pubic education for possibly long enough to get our schools off the killing floor. This is a nice thing, except that there are two nice things competing for—and confusing—the same voters. In the ballot-measure business, this is bad.
The two props are different by degrees. Proposition 30, Gov. Jerry Brown’s baby, would raise sales taxes a quarter percent to 7.5 percent and nudges income taxes up a click or two progressively on four income-tax brackets starting at $250,000. The sales tax would sunset in 2016, the income tax in 2018. This one has the support of the Democratic Party, teacher’s union, the Service Employees Internation Union, etc., and is expected to raise about $6 billion a year while both taxes are in effect.
Meanwhile, Pasadena resident, civil-rights and education activist and heiress Molly Munger has put millions of her own money into Proposition 38, which would levy a progressive income-tax increase across the board topping at a 2.2 rise for those making more than $2.5 million. It would sunset in 2024. The proposition would raise at least $10 billion per year.
Prop 30 has a better chance of passing, and it targets the demographic that got us into this mess in the first place. But it’s a disaster that both of these initiatives are on the ballot, a quirk of the inanity of California’s ballot-initiative process, whereby throwing enough money at an initiative can get just about anything onto the ballot. A very possible worst-case scenario is that these initiatives divide and don’t conquer, leaving California to once-again mortgage its fiscal future on the backs of schoolchildren.