Guide to California tax and budget propositions

Oct. 11, 2012

By Wayne Lusvardi

On Nov. 6, voters face a number of  initiatives on the ballot targeted at California’s endemic budget and tax problems. All promise reforms embraced by both liberals and conservatives.  Some even are being marketed as libertarian reforms.  Here’s a rundown.

Props. 30 and 38 tax increases

Proposition 30 is called, grandly, the Schools and Local Public Safety Protection Act of 2012. And Proposition 38 is called, even more grandly, the Our Children, Our Future: Local Schools and Early Education Investment and Bond Debt Reduction Act.

Prop.  30 is Gov. Jerry Brown’s $8.5 billion income and sales tax increase, purportedly for public schools and police that mainly would tax the “rich.”

Prop.  38 is attorney Molly Munger’s proposed alternative, a $10 billion income tax increase on nearly all income levels except the poor to fund schools and pre-school programs.

Except that public schools have been overfunded the past few years. Some $4 billion was “borrowed” from public education to plug the state budget deficit since 2008.  Despite this loss of funding, no core teachers had to be laid off statewide.  In other words, public schools didn’t need the money.  On top of that, statewide enrollments in public schools have declined 1 percent and are projected to continue to decline.

The $4 billion borrowed from education funds was “internal borrowing,” not bonds.  These borrowings could be paid back in the long run with cost savings by shifting from politically protected “categorical” jobs programs for ancillary school personnel to block grants.

Sure, taxes from either Prop.  30 or 38 will go to public schools. But that would only free up already guaranteed education funds for other programs that are running deficits.  This is called “fungibility”: funds are interchangeable and can be used for education, social services, or road repairs.

School children are only political poster children to fund less popular programs such as Medicaid and public employee pensions. President Obama’s policy of shifting 1.5 million of the unemployed nationwide to Social Security Disability has put a $5 billion hole in California’s general fund budget, by this writer’s estimate.  Brown’s and Munger’s school tax proposals are just false fronts to cover up Obama’s financially ruinous policies to California, along with paltry state pension reform.

Proposition 98 already guarantees public schools about 43 percent of the entire state general fund budget no matter if attendance is declining or they didn’t even need $4 billion over the past few years.  Voters need to be informed that Props. 30 and 38 do not specifically earmark new funds for public schools.

Prop.  31 on the budget

Proposition 31 is called the Government Performance and Accountability Act. It promises five budget reforms:

1. A two-year budget cycle instead of annual budgets;

2. A requirement to identify funding for all legislative bills more than $25 million;

3. Authorization for the governor to declare a fiscal emergency;

4. Authorization for the governor to exercise line-item budget veto;

5. Requires performance budgeting in all state agencies.

The undisclosed problem with all of the above so-called reforms is that they already are on the books or can be implemented without voter approval or a constitutional amendment.   They are just an enticement to entice voters into approving the creation of an unelected new layer of government called Strategic Action Plan Committees — SAPs.

These committees supposedly would be able to relax environmental laws and other regulations to get public projects and programs done more cost effectively.  But then why do we need such phony committees in the first place?  Why not just deregulate the revenue sharing funds that flow from Sacramento to local cities and counties?  What Prop. 31’s Strategic Action Plan Committees are all about is tax sharing between financially strapped big cities and wealthier suburbs.

Let’s look at just the provision in Prop. 31 that funding needs to be identified before passing any bill in the legislature of $25 million or more.  This can be so easily gamed by creating only $24.9 million expenditures, fudging the numbers of spending cuts to afford new programs, using projected revenues that never materialize for new spending programs, and padding expenditure bills so that the governor can appear to reduce them with his veto.

Prop. 31 is a pretense for elites to grab public funds away from local governments for their pet projects and programs.  It would undermine representative government and the cost savings are artificial.

Proposition 39: Interstate protectionism

Proposition  39‘s title seems so wonderful: the Tax Treatment for Multistate Businesses, Clean Energy, and Energy Efficient Funding Initiative Statute.

It is a proposition being funded by another billionaire, “hedge-fund king” Tom Steyer, who has bankrolled it with $20 million.

Prop. 39 is a sort of new version of the Smoot-Hawley Act of the 1930’s that was blamed for triggered the Great Depression. The Smoot-Hawley Act raised U.S. tariffs on imported goods.  Likewise, Prop.  39 will increase taxes on out of state businesses trading with California.  Ballotpedia.com more accurately calls Prop.  39 the “Income Tax Increase for Multistate Businesses Initiative.”

Prop.  39 supposedly would level the playing field between businesses inside and outside of California.  But it would be ripped off by well-connected elites, such as Tom Steyer, to reap a windfall on overpriced alternative energy schemes. This will only add to the cost of higher energy under California’s Cap and Trade program to be rolled out in January 2013.

And it will raise the price of consumer goods from out-of-state suppliers.  So Prop. 39 may close a $1 billion tax “loophole” in “lost” revenues for California.  But this would be offset by increased costs for electricity and consumer goods from other states.

In short, the November election gives voters a choice on how they will structure state finances for years and even decades to come. Let’s hope they choose wisely.

 

41 comments

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  1. Rex the Wonder Dog!
    Rex the Wonder Dog! 11 October, 2012, 08:03

    30 and 38 are DOA.

    31 sounds OK but I have no idea what it is about.

    39 DOA.

    37, not enough info.

    32 is a big YES.

    Reply this comment
  2. Rex the Wonder Dog!
    Rex the Wonder Dog! 11 October, 2012, 08:15

    Teddy- the SKY JUST FELL little buddy;

    State Controller John Chiang: cash deficit for the first THREE months of this fiscal year:
    $22.3 billion.

    Does not include:
    – $12 billion owed schools,
    – $10 billion owed the Feds for loaning us money to be able to bail out our unemployment insurance fund,
    – $12.3 billion STOLEN from Trust Funds to cover the deficit,or
    – $10 billion BORROWED to cover the deficit.

    $23 BILLION deficit in the FIRST 3 MONTHS…..!!!!!!!!!!!!!!!!!!!!!!!!!!!

    Reply this comment
  3. Ulysses Uhaul
    Ulysses Uhaul 11 October, 2012, 08:47

    The CWD posting HOG just oinks and oinks and oinks. Too barn yard to take a hint….

    CUT THE JUVIE POSTS!

    Reply this comment
  4. Rex the Wonder Dog!
    Rex the Wonder Dog! 11 October, 2012, 09:01

    SKY FELL!

    Reply this comment
  5. Ted Steele, CEO
    Ted Steele, CEO 11 October, 2012, 09:11

    What’s the likely outcome for Proposition 30, Gov. Jerry Brown’s proposed tax increase? That’s the million-dollar question — well, OK, the $6-billion question — for the California political community at the moment.

    Prop. 30 is ahead in the most recent IGS/Field Poll, 51-36 with 13 percent undecided. A nearly simultaneous PPIC Poll has remarkably similar numbers, especially on the yes side, at 52-40-8.

    mmmmmmmmmmmmmm 0 for 13 ™

    Reply this comment
  6. SeeSaw
    SeeSaw 11 October, 2012, 09:14

    Prop. 30, “YES”;
    Prop. 31, “NO”;
    Prop. 32, “NO”;
    Prop. 38, “NO”;
    Prop. 39, ?

    Reply this comment
  7. Tom in SoCal
    Tom in SoCal 11 October, 2012, 09:36

    How about an article link to that story?

    Reply this comment
  8. Susan
    Susan 11 October, 2012, 10:33

    REX —- Prop 31 is arguably the WORST initiative of the bunch. The bad stuff is hidden beneath prettied-up “reform” items that apparently voters say they want. But these items don’t even need voter approval to be put into play.
    See the articles below, which explain why Prop 31 is bad news:
    http://www.nationalreview.com/corner/315838/californias-awful-prop-31-your-future-stanley-kurtz
    http://www.calwatchdog.com/2012/08/30/prop-31-would-regionalize-state-revenue-sharing/

    Reply this comment
  9. Rex the Wonder Dog!
    Rex the Wonder Dog! 11 October, 2012, 12:12

    30- No
    38- NO
    32- YES

    Reply this comment
  10. Rex the Wonder Dog!
    Rex the Wonder Dog! 11 October, 2012, 12:16

    Ted Steele, Head CWD Dork says:

    What’s the likely outcome for Proposition 30, Gov. Jerry Brown’s proposed tax increase? That’s the million-dollar question — well, OK, the $6-billion question — for the California political community at the moment.

    Prop. 30 is ahead in the most recent IGS/Field Poll, 51-36 with 13 percent undecided. A nearly simultaneous PPIC Poll has remarkably similar numbers, especially on the yes side, at 52-40-8.
    ================

    LOL…another teddy predivction failre, like all the rest 😉

    Proposition 30 isn’t seeing strong statewide support

    Wednesday, October 10, 2012
    FRESNO, California (KFSN) — With less than a month to go until Election Day, a new poll shows a ballot measure to fund schools and public safety isn’t seeing strong statewide support. According the results of an exclusive Action News Poll conducted by SurveyUSA, 38 percent of decided voters said they planned to vote “no” on Proposition 30. 33 percent said they will vote in favor of the measure, and 29 percent of those surveyed were still undecided.

    Prop 30= DOA……Rotti is never wrong.

    http://abclocal.go.com/kfsn/story?section=news/politics&id=8843100

    Reply this comment
  11. Queeg
    Queeg 11 October, 2012, 13:14

    Everyone but the usual loons on this informative site know taxes must go up. Why waste energy on a simple known truth. Taxes must rise to support our educators and security personnel as well as the sick and infirmed among us.

    On greedy conservatives need to respond to this crystal clear post.

    Reply this comment
  12. Rex the Wonder Dog!
    Rex the Wonder Dog! 11 October, 2012, 13:43

    Teddy-glad to see you’re spelling Queeg’s name right!

    Reply this comment
  13. Ted Steele, CEO
    Ted Steele, CEO 11 October, 2012, 13:59

    The poll says that 54 percent of California voters still support Gov. Jerry Brown’s plan to temporarily raise sales and income tax to prevent cuts to schools next year.

    The one bright spot in the results is the growing intensity of support for Prop 30. In March, 37 percent of voters strongly favored it — that’s grown to 41 percent.

    “Intensity matters in a ballot issue and who votes,” said pollster Stan Greenberg.

    LOL– sorry Poodle! 0 for 13 ™

    Reply this comment
  14. Rex the Wonder Dog!
    Rex the Wonder Dog! 11 October, 2012, 15:08

    The “POLL” said Prop 30 is getting destroyed;

    According the results of an exclusive Action News Poll conducted by SurveyUSA, 38 percent of decided voters said they planned to vote “no” on Proposition 30. 33 percent said they will vote in favor of the measure, and 29 percent of those surveyed were still undecided.

    Reply this comment
  15. Rex the Wonder Dog!
    Rex the Wonder Dog! 11 October, 2012, 15:12

    “Intensity matters in a ballot issue and who votes,” said pollster Stan Greenberg.
    ==
    Bwhahahahhaha….Stan Greenberg!!!!!!! Yes, he is a fantatsic source of unbiased information;

    “Stanley Bernard “Stan” Greenberg (born May 10, 1945) is a leading Democratic pollster and political strategist who has advised the campaigns of Bill Clinton, Al Gore, and John Kerry, as well as hundreds of other candidates and organizations in the United States…”

    Teddy, you’re truly dumber than a bag of rocks!

    Reply this comment
  16. Ted Steele, CEO
    Ted Steele, CEO 11 October, 2012, 15:31

    Hey—- the Poodle can google!

    We never thought he could!

    0 for 13 ™ !

    Reply this comment
  17. Rex the Wonder Dog!
    Rex the Wonder Dog! 11 October, 2012, 15:39

    Prop 30 = DOA…and your copy and paste nonsense is done!

    144-0 baby 🙂

    Reply this comment
  18. Rex the Wonder Dog!
    Rex the Wonder Dog! 11 October, 2012, 15:39

    Prop 30 = DOA…and your copy and paste nonsense is done!

    144-0 baby 🙂

    BTW what is Google????

    Reply this comment
  19. Ulysses Uhaul
    Ulysses Uhaul 11 October, 2012, 16:06

    CWD POSTING HOG….. goes beserk….

    SPARE US……PLEASE…..

    Reply this comment
  20. Rex the Wonder Dog!
    Rex the Wonder Dog! 11 October, 2012, 16:29

    Hi teddy!

    Reply this comment
  21. Rex the Wonder Dog!
    Rex the Wonder Dog! 12 October, 2012, 09:27

    Ted Steele, CEO says:

    Hey—- the Poodle can google!

    We never thought he could!
    =================

    Google this troughie;

    Wall Street isn’t putting ridiculous parcel taxes on the ballot, Wall Street didn’t force Gray Davis to retroactively hike pension payouts by 20+%, Wall Street didn’t tell local politicians to pay cops more than pediatricians, or to have 1/3 of SF city employees making $200k+/year or the Alameda County Sheriff to pull down over a half million last year. Wall Street didn’t make the politicians cave to every prison guard demand so that our prison costs are more than double the national and federal average. That’s all on the failed policies, politicians and electorate of this state.

    Reply this comment
  22. Ted Steele, The Decider
    Ted Steele, The Decider 12 October, 2012, 09:55

    Are you on your meds Poodle? You seem like you’ve been coming a bit unraveled lately.

    0 for 13 ™

    He wants so badly to be 1 for 14 in November. I hope he makes it honestly.

    Reply this comment
  23. Rex the Wonder Dog!
    Rex the Wonder Dog! 12 October, 2012, 12:45

    Nov 6 you lose AGAIN!!!!!!!!!!!!!!!

    Reply this comment
  24. Ted Steele, The Decider
    Ted Steele, The Decider 12 October, 2012, 13:23

    Poodle– don’t you think we ought to let these grownups have their blog back?

    Reply this comment
  25. Queeg
    Queeg 13 October, 2012, 12:22

    If you calculate all the posts on CWD there is one egomaniac who rails about everything and anything and makes no sense….even his gal Big Betty is thinking about dumping him at the truck stop workplace….she is sick of eating Robolli frozen pizza shells dolled up with 7-11 fixins while he insists she is special and he only orders in from MOZZA, Mario Batali’s gourmet italian joint.

    Reply this comment
  26. Rex the Wonder Dog!
    Rex the Wonder Dog! 13 October, 2012, 13:39

    If you calculate all the posts on CWD there is one egomaniac who rails about everything and anything under multiple names, and makes no sense….even his gal Big Betty is thinking about dumping him at the truck stop workplace….she is sick of eating Robolli frozen pizza shells dolled up with 7-11 fixins while he insists she is special and he only orders in from MOZZA, Mario Batali’s gourmet italian joint.

    Than peson is Teddy Steals 😉

    Reply this comment
  27. Ted
    Ted 13 October, 2012, 16:10

    Queeg nailed it…….but I think poodle wants to n big Betty!
    O for 13 ™

    Reply this comment
  28. Ted
    Ted 13 October, 2012, 16:12

    “than” person?

    Poodle gets soooo excited!

    Any comment for the group about your now famous lawsuit prediction failures from OC?

    Reply this comment
  29. Ulysses Uhaul
    Ulysses Uhaul 13 October, 2012, 17:21

    Who believes this Poodle…he has nameless made up polls…..that is naughty. Prop #30 is a winner……ah….redistribution from CWD posters is so so needed for the kids, fire and police and prison workers.

    Reply this comment
  30. Ted Steele, The Decider
    Ted Steele, The Decider 13 October, 2012, 22:03

    Yes! Workers control the means of production!

    Reply this comment
  31. Ulysses Uhaul
    Ulysses Uhaul 13 October, 2012, 23:44

    If bees die off in ten years there will be little food!

    No diff with state and local workers…in less than 1 year civilization may revert to the cave dweller era!

    Reply this comment
  32. Rex the Wonder Dog!
    Rex the Wonder Dog! 14 October, 2012, 09:43

    News Poll conducted by SurveyUSA, 38 percent of decided voters said they planned to vote “no” on Proposition 30. 33 percent said they will vote in favor of the measure

    30 is going down in FLAMES BABY!!!!!

    Teddy is going to meltdown so bad on Nov 6.

    Reply this comment
  33. Ted Steele, The Decider
    Ted Steele, The Decider 14 October, 2012, 10:03

    No Poodle boi—– I won’t melt down if 30 fails. I will congratulate you on your new status as…………wait for it…………………. 1 for 14 ™ !

    And then I will congratulate you on it over and over again!

    You’ll LOVE it !!!!!!!!!!!!!

    But don’t you think we should let the grownups have their blog back?

    Reply this comment
  34. Rex the Wonder Dog!
    Rex the Wonder Dog! 14 October, 2012, 14:02

    I will congratulate you on your new status as…………wait for it…………………. 1 for 14 ™ !

    And then I will congratulate you on it over and over again!

    You’ll LOVE it !!!!!!!!!!!!!
    =

    OK, I just made a screen shot of that post.

    Reply this comment
  35. Ted Steele, The Decider
    Ted Steele, The Decider 14 October, 2012, 15:55

    But here’s some bad news for the no crowd…..

    http://www.latimes.com/news/local/la-me-students-vote-20121014,0,1522296.story

    0 for 13 ™ !

    Reply this comment
  36. Rex the Wonder Dog!
    Rex the Wonder Dog! 14 October, 2012, 17:56

    “Proposition 30 isn’t seeing strong statewide support”

    FRESNO, California (KFSN) — With less than a month to go until Election Day, a new poll shows a ballot measure to fund schools and public safety isn’t seeing strong statewide support. According the results of an exclusive Action News Poll conducted by SurveyUSA, 38 percent of decided voters said they planned to vote “no” on Proposition 30. 33 percent said they will vote in favor of the measure, and 29 percent of those surveyed were still undecided.

    http://abclocal.go.com/kfsn/story?section=news/politics&id=8843100

    Reply this comment
  37. Rex the Wonder Dog!
    Rex the Wonder Dog! 14 October, 2012, 17:58

    Teddy, the bet is still there, all you need to do is put $$$ where mouth is;

    #1- $100, or;

    #2 the loser/you (and your sock puppets) stay off CWD for a week

    🙂

    Reply this comment
  38. Ted Steele, The Decider
    Ted Steele, The Decider 14 October, 2012, 18:27

    No Poodle boi—– I won’t melt down if 30 fails. I will congratulate you on your new status as…………wait for it…………………. 1 for 14 ™ !
    And then I will congratulate you on it over and over again!
    You’ll LOVE it !!!!!!!!!!!!!
    But don’t you think we should let the grownups have their blog back?

    Reply this comment
  39. Moravecglobal
    Moravecglobal 22 October, 2012, 19:52

    Einstein on Prop. 30, Prop. 38 – “Spending more money on doing what has been done in the past and hoping for a better outcome is insanity”.
    Have the innovative, thoughtful, insightful, creative teachers and faculty create methodologies to increase learning with significantly reduced resources $. Be American do more with less!
    No on 30, No on 38 and No on 32

    Reply this comment

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