Despite the efforts of a governor who has made balancing the budget a top priority, California's finances remain deeply troubled. And, by all accounts, no end is in sight. Last week, a task force studying the state's budget deficit revealed that the state's off-the-books debt totals as much as $335 billion, a figure that the governor's office has not disputed.
But for all his budget-fixing zeal, Brown keeps employing the same old tricks that got us where we are now. Reliance on overly rosy sales tax estimates. Crossing his fingers that more than $1 billion would materialize from Facebook's initial public offering of stock. Now he has offered Proposition 30. We'll give Brown this: Extorting voters is a novel approach, but the measure's substance is anything but.
As desperate as the state is for money, we oppose Prop. 30 because it promotes the same bad budgeting policies that pushed the state into the mess it's in today. However, recognizing that some general fund relief is needed, and that public schools must be protected from ever again being held hostage to politics, we instead support a superior proposal: Proposition 38.
This measure would temporarily increase state sales tax one-quarter percent and income tax on those making $250,000 or more. That's a popular way among voters to raise taxes -- bill the rich -- but it's an erratic way to budget for critical state programs. Just look at the "millionaire's tax" already in place to fund mental health programs: The extra 1 percent tax on incomes over $1 million has raised $1.5 billion in the best years, but in 2009-10, when the economy tanked, that revenue dropped by half to about $700 million, according to the Legislative Analyst's Office. The same could happen to our schools and other government programs under Proposition 30. Additionally, it's imperative to point out that, contrary to the governor's claims, Proposition 30 does not create new revenue for schools; it merely restores some of what's already been cut. Even the head of the State School Boards Association has acknowledged this.
There are things to like in Prop. 30. It does a lot for local governments. It forces the state to fund programs it transfers to locals and guarantees funding for prison realignment. Those are good reforms. But mixing a little good in with a bad overarching fiscal policy isn't enough to justify our support for this measure.
It's time for Californians to demand a real fix to its fiscal problems, not a short term stopgap like Proposition 30.
We recognize that the cuts our schools have endured in recent years cannot continue. Educating our children is a critical responsibility of state government but Sacramento has failed to restore California to its one-time position of leadership in the classroom. Nothing will do more to secure our state's economic future than providing a well-rounded education to its people.
Proposition 38 increases income tax rates across the board for 12 years -- a small hike that is expected to raise $10 billion annually. The funds go directly to schools and early childhood education, not into the state education bureaucracy. The money can't be used to raise teacher or administrative salaries and benefits but it can be used to restore laid-off teachers, fund art, math and physical education classes, reduce class sizes and lengthen the school day. Those decisions are left to individual school districts -- as long as they deliver annual audits explaining how the money was spent.
Some state budget relief is provided. In the first four years, 30 percent of Proposition 38 revenue will go to pay off state bond debt, a provision that should free up about $3 billion annually in general fund money. That's awfully close to the additional money the general fund would see under Proposition 30 after money for schools is subtracted. The major difference is that, over time, Proposition 38 will send far more money to schools than Proposition 30 while aggressively paying down bond debt.
Critics of Proposition 38 say its unfair to tax incomes as low as $7,000. The reality is, the lowest income-tax brackets probably won't be impacted due to assorted tax breaks. Yes, the increase would amount to about $30 a year for the lowest bracket, but consider that those Californians would pay in Brown's plan as well, by way of the sales tax increase; Prop. 38 has no such sales tax component. Public education is not something the rich should fund alone. An educated state benefits all of us; we should all pay in what we can.
The bottom line is this: Proposition 38 is one of the most promising education proposals we've seen in a long time. Where Proposition 30 would stop the bleeding in schools, Proposition 38 provides enough money to transform the state's education system, which now ranks 47th in per-pupil funding.
Proposition 38 is the clear choice for voters who want their tax dollars to make a difference.