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Cut the baloney on tax plan

Brown has a compelling case for his initiative. He should tell it straight.

March 22, 2012|George Skelton | Capitol Journal
  • The governor wants voters to believe that all the billions raised by his tax hike would go to K-12 schools and community colleges. They won't.
The governor wants voters to believe that all the billions raised by his… (Rich Pedroncelli / Associated…)

Reporting from Sacramento — It's disingenuous. It's a bait-and-switch. And it's baloney.

That's being polite.

I'm referring to Gov. Jerry Brown's merchandising of his latest proposal to raise taxes.

Don't misunderstand. I'll probably vote for it if Brown can collect enough signatures — about 808,000 — to qualify the measure for the November ballot. It could be a tight squeeze, but he should be able to do that. He has until Aug. 13.

My gripe is that I can't stand Sacramento double-speak. I'm all spun out.

Brown wants voters to believe that all the billions raised by his tax hike would go to K-12 schools and community colleges. They won't. And he knows that as well as anyone.

But that didn't prevent him from telling reporters Tuesday: "The taxes that I'm proposing on sales and higher income people goes to the schools — 100% of it."

Then he added in typical government gobbledygook: "But it goes in a way that integrates it with the budget itself. That's very important because the other initiative will leave a budget deficit… I think on balance ours is far superior."

Brown's measure — which recently was merged with a more liberal tax plan backed by the California Federation of Teachers — is superior to a remaining rival precisely because all his new revenue would not go to schools. Most of it would be used to fill a gaping state budget deficit while staving off further cuts to universities and programs to assist the poor.

Practically all new money from the rival plan, sponsored by civil rights attorney Molly Munger, would be spent on schools.

To believe that all of Brown's new revenue would go to schools, you'd have to buy into the legitimacy of giving with one hand and taking with the other.

Put it this way: Technically, all of the new money would be spent on schools. But some of the old money that now goes into the schools kitty no longer would. It would stay in the state's general fund for budget-balancing. Bait and switch.

In Sacramento, they call that "back-filling." Take away one pot of money and replace it with another.

California school financing is extremely complicated, primarily due to the funding guarantee of Proposition 98, an initiative passed by voters in 1988.

The shorthand explanation of Prop. 98 is that it guarantees schools and community colleges a portion of the general fund — 40%, give or take. The figure bounces around. Don't ask.

This stuff is tall weeds growing in a deep swamp. We'll just say that by increasing general fund revenue, the minimum guarantee for schools also rises. And under Brown's plan, schools would get that extra guaranteed money, but not the entire additional tax take, as he implied.

The first 18 months of the tax hike would raise $9 billion, according to the state Finance Department. Schools would be entitled to $3.8 billion, or 42%. The remaining $5.2 billion, or 58%, would be earmarked for budget balancing.

So schools wouldn't be benefiting from a bump equal to 100% of the new taxes.

But pity the poor civic-minded voter who tries to inform himself. First there's the initiative's official title and summary, written by the attorney general. It says the tax revenues are allocated "89% to K-12 schools and 11% to community colleges." No mention of back-filling, let alone bait-and-switch.

Then there's the actual initiative text.

Reading that, you first encounter 15 paragraphs of "findings" and "intent" that are primarily propaganda. They have no legal standing except to maybe establish the initiative's intent if a court ever has a question. Their main purpose is to spin the public.

For example:

"The new tax revenue is guaranteed in the Constitution to go directly to local school districts and community colleges… To ensure these funds go where the voters intend, they are put in special accounts that the Legislature cannot touch… These funds will be subject to an independent audit every year to ensure they are spent only for schools and public safety."

Public safety? No money is raised by the initiative for public safety. Those funds already have been dedicated. The measure does, however, enact a constitutional guarantee that the state will continue funding public safety tasks that Brown has shifted from

the state to local governments.

The initiative "findings" are full of double-speak. While promising that the taxes will be spent only for schools and public safety, they also assert that money will be "freed up to help balance the budget."

This was all driven by polling and focus groups. Voters have said they might be willing to pay higher taxes for schools, but not for other programs.

They also don't trust the Legislature to handle the money.

"The marketing folks want to say it all goes to public schools," says an important Capitol Democrat, who didn't want to be identified because the governor might get angry. "The 'findings' are mainly for marketing."

One of California's most successful initiative operatives told me: "Everyone does it. It's not like one side is doing it and another is pristine… Ninety percent of any initiative's 'findings' is bull.

"We've gone to a whole new level of deception. Voters are being sold a bill of goods. It just contributes to the growing cynicism about government."

Brown has a compelling story to tell about his tax plan. He should tell it straight.

It's good to compromise with rivals — bad to compromise with truth.

george.skelton@latimes.com

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