In Depth on Measure Temporary Taxes to Fund Education. Guaranteed Local Public Safety Funding.
Ballot Measure:Proposition 30: Temporary Taxes to Fund Education. Guaranteed Local Public Safety Funding.
Proposition 30 is a Constitutional Amendment that seeks to fund the budget shortfall by temporarily raising the sales tax and income tax.
STATE BUDGET SHORTFALL
As the 2012-13 budget process began, there was a projected budget shortfall of approximately $16 billion. In the final approved budget, this shortfall was closed largely through the following:
- $8.1 billion in state spending reductions, including $1.2 billion to Medi-Cal, $529 million to state employee compensation, and $469 million to CalWORKS welfare-to-work services.
- $6 billion in additional revenues, nearly all from Prop 30.
- $2.5 billion in loan repayment extensions, transfers from special funds, and other one-time actions.
COMPROMISE TO GET PROP 30 ON THE BALLOT
When running for governor in 2010, Governor Brown made a commitment that any tax increases would be submitted to a vote by the people. This commitment is met by the placement of Prop 30 on the November ballot, although this was done through a gathering of signatures rather than by action of the Legislature.
The provisions of Prop 30 are a compromise reached between Governor Brown’s initial tax revenue proposal, which had been endorsed by the California Teachers Association, the state’s largest teachers’ union, and another proposed tax increase proposition initiated by the California Federation of Teachers (CFT), the state’s second largest teachers’ union. The deal between the Governor and the CFT spreads the income tax burden on top earners while reducing the sales tax increase, and would generate approximately $2 billion more in the current fiscal year than the Governor’s original proposal would have raised.
The impetus for this agreement was to reduce the number of tax-related propositions on the November 2012 ballot. Many political analysts believe that the presence of more than one proposition on a given subject on a single ballot will tend to decrease the likelihood of success of any of them passing. Despite this agreement to eliminate one competing tax proposition, there are still other tax-related propositions on this ballot. Prop 38 in particular is similar to Prop 30 in proposing to significantly increase income tax rates, but would dedicate a very substantial part of its incremental revenue just to education. Prop 39 would increase only corporate income taxes, and therefore is not directly competitive with Props 30 and 38. And, finally, there is Prop 31, which has provisions relating to the state budget process but nothing about tax increases.
REIMBURSEMENTS OF CERTAIN COSTS RELATED TO BROWN ACT
One of the provisions of Prop 30 would be to stop the state’s reimbursement of local governments for certain costs of complying with the public notice rules of the Brown Act. The Brown Act was passed in 1953 to ensure that meetings of governmental bodies were open to the public. The requirement to post agendas 72 hours before meetings was added in 1986, and a state commission later said local governments could bill the state for complying. However, the Legislature has repeatedly deferred such payments during California’s budget crisis, and the state now owes local governments almost $97 million in reimbursements.
Although guidelines for making such reimbursements are set by the state, there has been little consistency in the accounting methods used by local governments, and some are billing the state at much higher rates than their neighbors, according to a Los Angeles Times review of claims filed this year. The Times article further pointed out that, in this electronic age, the requirement to post agendas “might be fulfilled with a few keystrokes.”
For example, the city of Los Angeles and the county of Los Angeles each reported that it took employees 30 minutes to complete each item on each agenda for meetings held by council members or county supervisors. The city charged the state $95.42 an hour, nearly twice the county’s rate of $53.94. In total, the city of Los Angeles billed the state $336,067 for 1,182 meetings in the 2010-11 fiscal year, while the county, which held 3,421 meetings, more than any other municipality or agency, billed $188,749. The county had the lowest average per-meeting cost in the state, $55.17.
If voters approve Prop 30, local governments will no longer be able to pass these costs to the state, but they will still be held to the public notice requirements. Local governments will most likely continue compiling and posting agendas whether or not money comes from the state, as some jurisdictions have their own rules that are even stricter than the state’s.
CONFLICTS WITH OTHER PROPOSITIONS
As noted above, Props 30 and 38 contain conflicting tax-increase provisions. The Constitution specifies that, if two conflicting measures both pass, the one with the most votes will go into effect where it conflicts with the one that receives the lesser number of votes, but that any provisions in the latter that don’t conflict with the winning proposition will still go into effect. Nowadays, most propositions include a “poison pill” provision that allows them to avoid what’s in the Constitution. In this case, if both measures pass, the propositions specify the following: Prop 30 provides that, if it passes with a greater number of votes, nothing in Prop 38 would go into effect. Prop 38 provides that, if it passes with a greater number of votes, the tax-increase provisions of Prop 30 would not go into effect. In that event, under the California Constitution, any provisions of Prop 30 not related to tax increases would still go into effect, such as the “trigger cuts” to expenditures.
Arguments In Support
- Prop 30 is the only initiative which protects school and safety funding and addresses the state’s chronic budget mess.
- Prop 30 is the only initiative which establishes a guarantee for public safety funding in our state’s Constitution.
- Prop 30’s taxes are temporary, balanced and necessary for vital services.
Arguments In Opposition
- Prop 30 is a shell game; there are no assurances that tax increases will actually benefit classrooms.
- Politicians and special interests want to continue their out-of-control spending, but not make meaningful reforms.
- The Governor, politicians and special interests are threatening voters by imposing trigger cuts if the proposition does not pass.
More about Supporters
Yes on Prop. 30—to Protect our Schools and Public Safety, a broad coalition of business, labor, law enforcement, teachers and Governor Brown • www.YesOnProp30.com
Supporters of Prop 30 include:
(Signers of official arguments are in bold.)
- Governor Jerry Brown
- California Democratic Party
- California Federation of Teachers
- California Teachers Association
- California Police Chiefs Association
- California School Employees Association
- California State Council of Service Employees
- California State Sheriffs’ Association
- League of Women Voters of California
Major Financial Contributions
(as of September 1, 2012 total: $26.5 million)
- American Federation of Teachers ($3,855,000)
- Service Employees International Union ($2,319,139)
- California Teachers Association ($1,599,917)
- California School Employees Association ($1,250,000)
- Democratic State Central Committee of California ($1,046,172)
- United Brotherhood of Carpenters and Joiners of America ($1,000,000)
- California Nurses Association ($1,000,000)
- Laborers International Union of North America ($855,056)
- United Domestic Workers of America ($800,000)
- Coca-Cola Company ($778,818)
More about Opponents
No on 30—Californians for Reforms and Jobs, Not Taxes, a coalition of taxpayers and small businesses • www.ReformsAndJobsNotTaxes.com
Opponents of Prop 30 include:
(Signers of official arguments are in bold.)
- Tom Bogetich, former executive director, California State Board of Education
- California Republican Party
- Howard Jarvis Taxpayers Association
- Doug Boyd, Member, L.A. County Board of Education
- National Federation of Independent Business/California
- Small Business Action Committee
- Sacramento Taxpayers Association
Major Financial Contributions
(as of September 1, 2012 total: $1.9 million)
- No New Taxes - Howard Jarvis ($720,475)
- Small Business Action Comittee PAC ($210,000)
- Charles B. Johnson ($200,000)
- Jerry Perenchio ($200,000)
- John Cox ($100,000)
- Frank E. Baxter ($50,000)
- G. Leonard Baker, Jr. ($50,000)
- Park Place Asset Management ($25,000)
- Robert Arnott ($25,000)
From Voter’s Edge: