Schools chief already wants to extend Prop. 30 taxes

by Katy Grimes | January 13, 2014 4:59 pm

Monopoly game school tax cardOnly one year into Proposition 30’s five-year life, state Superintendent of Public Instruction Tom Torlakson has already called for an extension of the 2012 ballot initiative[1].

Set to expire in 2018, it was sold to voters as a temporary tax.

“’We need to renew Prop. 30,’ Torlakson, the state Superintendent of Public Instruction, said Wednesday night at a coffee meeting with local PTA leaders in a Sacramento home,” the Sacramento Bee[2] reported online.

Two days later, the Bee did a newspaper story [3] (and put it online[4]) about that same meeting with Torlakson in a private home. But those pieces said the meeting was to talk to parents and teachers about the new Common Core state education standards[5]. There was no mention of Torlakson’s call to extend Prop. 30[6] in the newspaper version of the story, yet both stories were written by Bee reporter Diana Lambert.

Perhaps Torlakson had an early copy of the Legislative Analyst’s Office 2014-15 fiscal review[7].

“As Proposition 30 [8]Personal Income Tax[9] increases phase out, much slower revenue growth forecasted,” the LAO headline said.

“Under Proposition 30, the increase in Personal Income Tax rates for high–income taxpayers generates a much greater proportion of revenue than the sales tax increase,” the LAO report[10] found.

Under a hypothetical recession, the LAO explained, “the revenue losses would be offset somewhat by lower Proposition 98[11] minimum requirements, and we assume that the state would reduce spending to the lower allowed spending levels.”

The LAO warned against overcommitting, which could bring back budget shortfalls.

General fund spending

The California Personal Income Tax[9] is two–thirds of the annual general fund [12]revenues.

“We note, however, that the proportion of the general fund supported by PIT[13] revenues likely would be growing even if Proposition 30 were not in effect due to more income concentration among the highest–income taxpayers and the other factors described earlier,” the LAO said.

Remember when Gov. Jerry Brown was campaigning to pass Prop. 30? “The taxes that I’m proposing on sales and higher income people goes to the schools — 100 percent of it,” the Los Angeles Times [14]reported Brown saying. “But it goes in a way that integrates it with the budget itself.”

(Note: The L.A. Times stories with this quote are no longer available; the story linked is in the Press Democrat, but is a column by L.A. Times columnist George Skelton.)

However, what Brown wasn’t saying is that when state revenue increases, so does school funding, automatically. Proposition 98,[15] passed in 1988 by the voters, guarantees K-12 public schools and community colleges about 40 percent of the general fund. So when general fund revenues go up, so does school spending. Conversely, when general fund revenues are reduced, school spending is also reduced.

“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 percent. The remaining $5.2 billion, or 58 percent, would be earmarked for budget balancing,” Skelton wrote.

So schools would not be receiving the bulk of the tax increase revenues. Is it any wonder Torlakson want to prolong the tax hike — other than a promise made to voters?

  1. the 2012 ballot initiative:,_Sales_and_Income_Tax_Increase_(2012)
  2. Sacramento Bee:
  3. newspaper story :
  4. online:
  5. Common Core state education standards:
  6. Prop. 30:,_Sales_and_Income_Tax_Increase_(2012)
  7. Legislative Analyst’s Office 2014-15 fiscal review:
  8. Proposition 30 :,_Sales_and_Income_Tax_Increase_(2012)
  9. Personal Income Tax:
  10. LAO report:
  11. Proposition 98:
  12. general fund :
  13. PIT:
  14. Los Angeles Times :
  15. Proposition 98,:

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