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Education cuts at stake in tax battle

Passage of Gov. Brown's Prop. 30 would spare schools and universities. But a Prop. 38 victory would trigger big reductions.

October 14, 2012|George Skelton | Capitol Journal
  • A rally for Prop. 30 last week.
A rally for Prop. 30 last week. (Reed Saxon, Associated…)

SACRAMENTO — Let's cut through all the baloney being spread in California's tax brawl and go straight to what's basically at stake.

At stake, at least in the near future, is whether public school funding will be slashed from kindergarten through the universities.

If Gov. Jerry Brown's Proposition 30 passes — and receives more votes than wealthy attorney Molly Munger's Prop. 38 — K-12 schools and community colleges will be spared $5.4 billion in budget cuts. Plus, the two university systems won't be dinged $250 million each.

VOTER GUIDE: 2012 California Propositions

If, however, voters reject Prop. 30 on Nov. 6, those education cuts automatically will be triggered by the current state budget that was enacted in June by the governor and Legislature.

In the unlikely event that Munger's measure passes and prevails over Brown's, the cuts still will be triggered. Her income tax increases — $10 billion annually — wouldn't kick in soon enough to save the schools this academic year.

What would be the practical effect? Probably a shortened school year, by two or three weeks, and increased class sizes. That's for starters. At the universities, tuitions again would rise.

There's a lot of cynicism about this by Prop. 30's anti-tax opponents. If the measure failed, they assert, these trigger cuts surely would be rescinded by the Legislature and governor under pressure from the powerful California Teachers Assn.

I'd like to think so. But that seems improbable.

First, there's no other spending program to cut to make up for anywhere near the $6 billion that would be lost in this budget year if Prop. 30's sales and "soak-the-rich" income taxes were rejected. The big money is in education.

Second, borrowing would be irresponsible. (OK, there is ample precedence for such foolishness in the Capitol.)

Third, it's doubtful the governor and Legislature would do what they should have done in the first place: Raise taxes themselves without going to the voters.

There certainly are other revenue sources besides the income and sales taxes. There's the vehicle license fee. An oil severance tax. Tobacco. Liquor. They could close the tax loophole that rewards out-of-state companies for not hiring and building in California if voters refuse to do it with Prop. 39.

But raising taxes would require a two-thirds legislative vote. More problematic, it would necessitate courage and competence — the ability to compromise on a package, say, of taxes and regulatory reform. Therefore don't count on it.

So the pressing issue in this eye-gouging tax fight is whether to whack education funding or to protect it.

But you won't hear that from Brown, let alone Munger.

This governor has been around the track before. He's leery of sounding too threatening, afraid that voters would get their backs up about school kids allegedly being held hostage by the tax-and-spenders in Sacramento.

He's correct, of course. So voters are being denied the truth they don't want to hear.

"Voters always say, 'Don't threaten me, you jerks,'" says Democratic consultant David Townsend, a veteran of many tax campaigns, but not this one. "They think if you're threatening them, you're trying to rip them off."

Brown has read polls and listened to focus groups. He believes his best pitch is to tell voters that the despised Capitol crowd couldn't get its hands on the new tax dollars.

Under Prop. 30, "Money must go to the classroom and can't be touched by the Sacramento politicians," says Democratic state Controller John Chiang in a TV ad.

Shame on Chiang. He surely knows better.

And kudos to Munger for challenging that malarkey in a counter ad. "Misleading," the Prop. 38 spot correctly contends.

"Don't be misled by the politicians."

Ouch. That last one really stings — calling Brown & Co. "politicians."

Let's try to make this simple: When Prop. 30 ads imply that all the new money would go to schools and claim it "can't be touched" by the Legislature, they may be technically correct. But it's like giving with one hand and taking with another.

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. In Sacramento, they call that "back-filing."

Under Brown's plan, schools would get extra money — already accounted for in the current budget — but not the entire additional tax take of Prop. 30. The rest would be handled and dispersed by our elected representatives, as it should be.

Interestingly, when Brown appears in a Prop. 30 spot he speaks the dead-on truth: "All funds will be used to stop school cuts and close California's budget deficit."

He lets others do the misleading.

Under Munger's measure, only 60% of the tax revenue would go directly to schools for the first four years. After that, 85% would. So politicians get their grubby hands on some of her new money too.

It's amusing to listen to all the wailing about Munger's anti-30 ads. She's endangering schools by harming the governor's already shaky chance of winning passage of his measure, liberals cry.

Hey, this is politics. Rivals attack. No one should be shocked. It's what Brown always feared and why he tried awkwardly last winter to dissuade Munger from proceeding.

Now he's being hammered in a perfect storm by both the anti-tax right — financially fortified, intriguingly, by Munger's brother, Charles Munger Jr. — and by the pro-tax left, Molly.

For Brown "It's as if Molly Munger was a cyborg created by some conservative super PAC," says Jack Pitney, political science professor at Claremont-McKenna College.

In the end, it's really about whether schools get walloped.

If Prop. 30 fails, the people who get hurt will be the school kids. Not the politicians.

george.skelton@latimes.com

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