Proposition 30 showcases a crucial debate playing out across California: Do we have a spending or revenue problem?
The ballot measure raises $6 billion for the state general fund by combining a temporary hike in the state income tax and raising the state sales tax by a quarter percent. If the measure fails, the state budget would trigger a series of large cuts mainly in public education.
For Orange County residents, like Estancia High School teacher Joel Flores, “it is simple math.”
“We have a $16-billion budget deficit right now in California,” said Flores, who visited the Voice of OC Community Editorial Board this week on behalf of the American Federation of Teachers.
“Prop. 30 doesn’t solve all that,” Flores said, “but it starts to bring us out of this problem that were in. It says we as a society value public education and we are going to invest in it and put our money where our mouth is.”
“The reality,” Flores said, “is we’ve taken over $20 billion in cuts in recent years. We need to stop the bleeding.”
Flores described Proposition 30 as a compromise between the governor and teachers union leaders, who were seeking another millionaires’ tax on the ballot. He said the state has already tried a cuts-only approach, and that won’t cover the gap on it’s own. The only way to get the state back on a sound financial footing, Proposition 30 supporters argued, is to raise revenues.
“We don’t think it’s too much to ask people like Kim Kardashian to pay 12.3 percent on their state income tax. She’s not going to move to Texas.”
Yet many others will, say opponents of Proposition 30.
“Right now, during the recession is the worst time to increase taxes,” said Jon Fleischman, publisher of the conservative Flash Report.
Fleischman, who also serves on the Voice of OC Community Editorial Board, echoes what many Republican conservatives and opponents of Proposition 30 believe: “Taxing wealth creators is a bad idea, because you either chase them out of the state or you certainly reduce their incentive to go out there and create jobs.”
He also sees a broken state bureaucracy that needs reform not just more money.
“What was demonstrated to California prior to this recession is we don’t have a problem with tax rates. If the economy is healthy and moving along, then the tax rates in California are more than sufficient.”
“Why should Californians invest more into this state Legislature and this governor at the same time they continue to promote more regulation, more job killing?” Fleischman asks.
“Proposition 30 is just going to be used to pay for an unfunded pension liability out in Sacramento that numbers in the hundreds of millions,” Fleischman said.
“It is literally tied to no reforms whatsoever,” he said.
That triggered a reaction from Voice of OC Community Editorial Board member Fred Smoller, a political science professor at Chapman University, who echoed the sentiment, noting that voters become frustrated when there’s excessive spending on things like high-speed rail projects.
“They look and say, “Gee, the governor is spending $5 billion on high-speed rail as a luxury, something we don’t have to have.”
“Now you’re saying backfill me here,” Smoller said of the school’s argument.
Yet Voice of OC Community Editorial Board member Jack Eidt, an urban planner and environmental activist, said many of the perceptions about high-speed rail are shortsighted.
For example, Eidt noted to Smoller, the rail project is funded through bonds, not the general fund.
And echoing Flores’ frustration with the lack of resources for education, Eidt also notes that the state also faces “a massive infrastructure deficit in this state, and we have to meet [air pollution] mandates.”
After listening to both Fleishman and Flores, Voice of OC Community Editorial Board member Ken Bell, who founded the county’s managed health care system known as CalOptima when he was Kaiser Permanente’s Orange County medical director in 1993, voiced frustration with both sides.
Looking at Fleischman, Bell noted, “there’s never been a time when tax increases have hurt. Never. There’s lot of data on that.”
Indeed, this week the San Jose Mercury News released an investigative report that shows the number of millionaires in California has essentially stayed put since 1997, despite high tax rates and a 2004 special millionaire’s tax used to fund mental health programs.
Bell also said that teachers and other public workers should be ashamed of themselves for the pension excesses in recent years.
While the choices are not great, Bell said the importance of getting the state’s revenues on track cannot be overstated, especially considering the importance of education to the state’s future.
“We need this tax,” Bell said. “And it’s for the children. This is not for the teachers. And it’s not against the rich. It’s for the children.”