By John Hrabe

Just a day before the election, California Democrats seem intent on self-destruction. Liberal activist Molly Munger has been trashing Jerry’s tax hike. Brad Sherman and Howard Berman have spent more than $13 million in their battle to the death. And Rep. Pete Stark has engaged in a “defamation” campaign against fellow Democrat Eric Swalwell.

Scott Lay, publisher of Around the Capitol, recently observed, “The governor’s tax increase has a very uphill battle at this point, after a hammering from the No on 30 campaign and mixed messages associated with Molly Munger’s Proposition 38.”

“How Molly Munger can live with herself — after virtually every independent political analyst in California advised her that she would crush school finances by going ahead with her self-indulgent ballot measure — we have no bloody idea,” lamented CalBuzz’s dynamic duo Jerry Roberts and Phil Trounstine.

But, let’s not get ahead of ourselves. California Democrats haven’t quite perfected some of the California GOP’s finest circular firing squad techniques.

5. Draw Clear Ideological Battle Lines: “You’re Either With Us or Against Us”

All parties have battles between party purists and moderates. What makes the California GOP so special? The California GOP has a particular knack for turning its ideological differences into organized grassroots fights.

When infighting reaches the level of your grassroots youth organization, you know it’s a serious problem. For years, California Republicans had not one but two young Republican clubs, the California Young Republicans and the Young Republican Federation of California. The state wasn’t overrun with baby elephants, thereby justifying two clubs.

The second young Republican group was the result of an ideological split between conservative activists and the liberal Bill Thomas machine. In 2011, the two clubs finally reunited, but not without one last stand from the former Thomas-ites.

This feud groomed an entire generation of GOP activists in the tradition of party feuding. How many of the party’s problems were compounded by the young Republican divide? How much resentment dates back to meaningless endorsement votes by the Y’s? Conflict causes grudges and, in turn, more conflict.

For Democrats, Gov. Jerry Brown has sown the seeds of a similar intra-party ideological divide. On pensions, the death penalty and school funding, Brown has staked out moderate ground, which should offend younger liberal activists. In a desperate effort to save Prop. 30, Brown has even courted the state’s business community with a recent appearance “at the headquarters of the Bay Area Council in San Francisco.”  The Occupy crowd within the Democratic Party can’t embrace Brown’s solicitation of big business.

Brown has moved so far to the right it’s unlikely that his younger self would approve. Brown once persuaded his father to stay the execution of a convicted rapist. In 2010, the former seminarian proclaimed, “There’s probably no person in America who has fought to enforce the death penalty more than I have.” This brash George W. Bush-style rhetoric can’t sit well with liberal Democrats, nor can Brown’s budget cuts. How can liberals accept Brown state budgets that spend more on prisons than schools?

The top-two primary will result in more “moderate versus liberal” Democratic general elections. In the Bay Area, Sally Lieber, a former three-term Assemblywoman, is doing her best to win a State Senate seat against the moderate, pro-business Assemblyman Jerry Hill.  Moving forward, the Democrats’ litmus test could be Prop. 30 and Prop. 38. Did you back the moderate measure or stand up for schools?

4. Offend a Key Voting Bloc

The California Republican Party’s downfall is inextricably linked to its poor standing with Latino voters.  It’s perfectly reasonable to disagree about immigration policy, but you can’t ignore the cost of that position.  Just compare California to Florida, where Democrats outnumber Republicans by more than half a million voters. Although Florida Republicans are outnumbered, they hold more than two-thirds of the seats in both houses of the state legislature. One savvy California political consultant told me that’s all because the Florida GOP courted Latino voters.

How do Democrats match that act? Can Democrats really offend a key voting bloc like California Republicans did with the Latino community? It’s tough to see a comparable scenario. But, it’s worth pointing to Brown’s latent sexism in his treatment of Munger. Brown’s first response to Munger was to dispatch his wife as an intermediary. Gust is a power player in her own right, but she doesn’t hold any official position.

Male donors aren’t passed off to a spouse, why was Molly? Can anyone say gender didn’t play a role in how the Brown team responded to Munger’s insurrection?  If Brown was serious about avoiding the 30 vs. 38 battle, why didn’t he personally call Munger?

The California Democratic Party has been no better than Brown in supporting women. The party has few high-ranking Democratic women in leadership positions. Governor, Lt. Governor, Controller, Treasurer, Superintendent of Schools, Insurance Commissioner, California Democratic Party Chair, Speaker of the Assembly, Senate President Pro Temp and the mayors of Los Angeles and San Francisco: man, man, man, man, man, man, man, man, man, man, man. Women hold just four of the highest positions: Secretary of State, Attorney General, Assembly Speaker Pro Tempore and Senate Majority Leader.

3. Use the Party Machine to Defeat Republican Candidates

The California Republican Party has a long history of officials using the party machine to exact revenge. Between meaningless party resolutions and votes to censor party officers, there are just too many examples to recount them all. The most recent example of party machinery working against Republican officials is occurring in the congressional battle between Rep. Gary Miller and State Sen. Bob Dutton. According to the Press Enterprise’s Cassie MacDuff:

“With two Republicans running against each other for the vacant 31st Congressional District seat, the California Republican Party has taken sides.

“A mailer showing a snoozing state Sen. Bob Dutton, R-Rancho Cucamonga, hit mailboxes this week. It paints him as a “big spender” who needs to ‘wake up.’ The CRP sent out at least three other mailers supporting Dutton’s foe — Rep. Gary Miller, R-Rancho Cucamonga — who was faced with having to run against another fellow Repub in his home district (in and around Diamond Bar), or move east to the new district (Rancho Cucamonga to Redlands) and take on Dutton. He took on Dutton.”

By using the party machine to exact revenge, you force people to take a side publicly. Only one official Democratic organization has endorsed Prop. 38: the Santa Monica Democratic Club. If Democrats want to really cause intra-party chaos, they should use the party machine to punish these renegades. De-charter the organization. Refuse to reappoint the party members. This mutiny can’t go unpunished, if Democrats want their circular firing squad to lock and load.

The Stark vs. Swalwell battle has gone down this path. The San Francisco Chronicle’s Carla Marinucci reports, “The president of a major East Bay Democratic Club has expressed revulsion at what he calls the ‘defamation’ campaign being run by Democratic East Bay Rep. Pete Stark, 81, who’s seeking his 21st term in a close contest against Democratic Alameda County prosecutor Eric Swalwell, 31.”

2. Scare Away Donors

The California Republican Party’s finances mirror the state’s. Both go through boom and bust cycles: the party waits for one wealthy benefactor or rich gubernatorial candidate to infuse it with cash in much the same way that California has relied on windfall profits from tech companies. Both need a broad base of support for long-term financial stability.

California’s many unions fund the Democratic Party. How on earth could Democrats scare them away? Prop. 30’s failure could set off a mad scramble among unions for precious state dollars. If Brown’s measure loses, there won’t be enough money to keep everyone happy. Education leaders could regret their decision to back Brown’s tax increase. Higher education already has broken ranks with legislative leaders. Should the tax increase fail, budget animosity will increase.

1. Losing Just Proves We Were Right!

The most important factor to a successful circular firing squad is interpreting your party’s losses as proof that you were right in the ideological fight. Loss isn’t a reason to change positions, tactics or your losing approach. It’s just proof those other guys screwed up.

Again, it doesn’t matter which side you’re on. Party purists and centrists selectively use party losses to reaffirm their moral superiority and self-righteousness. Look at the California GOP’s track record of failed US Senate nominees. In 2000, Tom Campbell proved voters wouldn’t embrace a moderate Republican. In 2006, Dick Mountjoy proved that conservative Republican candidates lose statewide elections. In 2010, Carly Fiorina was too conservative. In 2012, Elizabeth Emken was too moderate.

On Wednesday, look for similar recriminations from Democrats as they continue to take aim at one another.

John Hrabe’s first piece on Democratic circular firing squads is here.

By John Hrabe

For the past two decades, California Republicans have perfected one thing, the circular firing squad. No political party, organization or institution has been better at snatching defeat from the jaws of victory. The Republican monopoly on this self-destructive habit is about to end, thanks to Gov. Jerry Brown and civil rights attorney Molly Munger and their dueling tax measures.

This week, Munger’s Yes on Prop. 38 campaign began to compare its ballot measure, which is behind in the polls, with Brown’s tax hike, which is polling ever so slightly above 50 percent. Education leaders are worried that Munger’s comparison ads will doom both measures. Tax-raisers see that as the worst-case scenario. Education leaders tried to engage the two campaigns in what the LA Times described as a “peace summit.” 

But, it’s not just Jerry and Molly that can’t play nicely in the Democrats’ sandbox. This week, San Fernando Valley Congressmen Howard Berman and Brad Sherman got into a physical altercation at a debate. The race has been a conflict between two giant liberal egos rather than issues or ideology.  The two share almost identical voting records, but neither man was willing to run in the neighboring congressional district.

There’s not much advice to offer Howard and Brad, who are doing a first-rate job of wasting millions of Democratic dollars smearing each other. Might we simply suggest that the Berman team consider filing assault charges for Brad’s aggressive hug?

Jerry and Molly, you’re also off to a great start—on the verge of a truly historic mutually assured destruction. But, you also still have a long way to go before matching California Republican’s worst infighting. That’s why CalWatchDog has assembled a list of suggestions for the liberal circular firing squad.

10.   Stop Talking to Your Opponent & Refuse All Peace Offerings

The first step to any successful circular firing squad is to cut off all communication with your compatriots and turn them into mortal enemies. In 2000, the New Majority expressed its frustrations with the lack of minority and moderate candidates brought forward by the Orange County GOP. Instead of working cooperatively with conservative party officials to develop a candidate recruitment program, the moderates spent hundreds of thousands of dollars on what USA Today described as a “hostile takeover of the county GOP’s controlling body.” (I’m sure both sides object to my characterization of the dispute.)

Dialogue and engagement inevitably lead to compromise. You don’t want to compromise, do you? And besides, they started it!  Brown’s campaign seems to be well on its way to adopting this mantra. According to a late update to the LA Times’ most recent story, the Yes on Prop 30 campaign has refused the PTA’s peace summit:

“Brown’s campaign, which has ramped up its criticisms of Munger’s campaign tactics in recent days, dismissed PTA’s call for a meeting. 

“‘Why would we meet with her?'” said Dan Newman, a spokesman for the campaign. ‘We’re minding our own business, running a positive campaign and not mentioning any other initiative — while she’s spending milions in false attack ads against us.’ 

“[Updated 8:40 p.m.: Munger’s campaign, on the other hand, said ‘Molly would be happy to meet with Governor Brown.’ However, spokesman Nathan Ballard said Munger would not drop her advertising critical of Proposition 30. 

“[‘If the Prop 30 campaign takes down their misleading ads, then we would certainly consider taking down our ad responding to them,’ he said.]”

9.       Stick to Personal Attacks Instead of Policy Disagreements

California Republicans have proven it’s best to ignore the policy arguments in favor of ad hominem attacks. Call your opponents a squish, RINO or my personal favorite “a computer screen conservative.” There’s nothing like a personal attack to turn a one-time disagreement into an irreparable conflict. Gov. Brown is to be commended for launching the first personal attack. In September, he implied that by opposing his tax hike, Munger was committing a “sin.” When asked why he couldn’t stop Munger, Gov. Brown replied, “There’s something called free will. Even God can’t stop somebody from sinning if that’s their free will.”

Well done, Governor. To clarify— is Ms. Munger committing a venial or mortal sin?

8.       Coin a Clever Acronym (RINO) to Separate True Believers from Moderate Sell-Outs

No one likes to think. When a new politician comes around, even party activists can’t be bothered to research a politician’s position on the issues. Clever acronyms give party activists a mental shortcut. “Don’t support Joe, he’s a RINO, or Republican in Name Only.” RINO is an effective label because 1) it’s an acronym and 2) it plays off the animal-political party symbolism.

This could be a bit of a challenge for Democrats. DINO doesn’t really have the same symbolism. Maybe, LION? Liberal Identity Only in Name. Sure, lions have a reputation as strong and dominant creatures. Again, that’s if you think about it logically. Get creative. Lions are essentially the elite 1% of the animal kingdom. Not to mention lions are lazy and chauvinistic. Lionesses do all the hunting, while the male lion sleeps up to 20 hours per day. The only time a male lion fights is when confronted by another lion that’s trying to steal away his pride.

Does this sound totally absurd? Then, you aren’t ready for a circular firing squad, which requires a person to stop thinking. Seriously, why is it an insult to call someone a rhinoceros? Tell me logically why that makes sense. The only link to the insult: a rhino is not the same thing as an elephant.

The lion insult could take off with NOW and Planned Parenthood activists. Plus, for the environmentalists, what’s the carbon footprint on a lion’s carnivorous diet? Certainly more than an ideologically-pure vegetarian donkey.

7.       Extend the Campaign Season: Launch a Recall

Under normal circumstances, a party feud is limited to one election. One side wins, and the losing side lives to fight another day, presumably the next election. Long before Republicans succeeded in recalling Gov. Gray Davis, they perfected the recall on lower-level party turncoats. Anthony Adams, Paul Horcher, Doris Allen, the list goes on and on. With a recall, it’s open season for circular firing squads all-year.  Recalls help turn the occasional party primary feud into a permanent campaign.

It’d be tough to see Munger organize a recall of the Governor. She should consider a state legislator that is backing the Governor’s tax hike. Such a politician clearly doesn’t care for our children. Moreover, there are plenty of school board officials that could be recruited as challengers. Just look at the long list of school boards that have endorsed Proposition 38 and compare that to the number of state legislators.

6.       Get the Courts Involved (Bonus Points  for Criminal Charges)

The best circular firing squads get the courts involved. The other side isn’t just wrong on policy; they’re bad people who should be punished. In the 1990s, many of Orange County’s best Republican operatives were the subject of criminal charges for their campaign activities. Most avoided jail time because they didn’t break the law. The accusations and trial were enough to sideline them from future campaigns. And poor campaign workers usually can’t afford the expensive legal bills. When you try to send the other side to jail, it makes it impossible to forgive and forget.

The Munger-Brown tiff has already landed in the courts. Remember, Munger submitted her ballot measure before Brown, which normally would have given her a higher order on the ballot. Brown responded by pressing county registrars to verify his signatures before checking Munger’s. That led to a lawsuit filed by Munger challenging Brown’s ballot numbering shenanigans. Ultimately, Brown won the lawsuit. Not to be discouraged, circular firing quads aren’t about legal victories. It’s about cultivating ill will and setting the precedent that all disputes should involve lawyers.

Coming Soon: The Top 5 Tips for a Circular Firing Squad 

By John Seiler

When good-government types decried “mudslinging” in political campaigns, the late journalist Mike Royko instead cheered what he called “truth slinging.”

That’s why I’m loving the “truth slinging” onslaught by lawyer Molly Brown against Gov. Jerry Brown and his Proposition 30 tax increase. She’s ticked off at him because he dissed her, and her Proposition 38 tax increase. Especially when he connived with the Legislature to put Prop. 30 on the top of the ballot, where voters are more likely to choose “Yea,” while plunking Prop. 38 down near the bottom, where voters are more likely to choose “Nea.”

There’s an old saying that applies to Brown this time out, and to much of his political career: “So smart, so smart — so dumb.” Meaning: you can outsmart yourself. Due to his long experience in California government, going back to when he was a child and his father was getting involved in politics 70 years ago, Brown knows the ins and outs of state government like nobody before or since.

But he’s not too keen on human nature, as in: Don’t tick people off too much. In his classic, “On War,” Sun Tzu even advised, “Don’t cut of your enemy’s path of retreat.” The aim of war, including political war, is victory, not humiliation and annihilation.

Her video follows. Given that I oppose all taxes, I’m happy to see her ad attacking Prop. 30. As the late Jackie Gleason liked to say, “How sweet it is!”

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.

By Chris Reed

Call it “The Tales of Two Tax Hikes.”

So the pro-Proposition 30 campaign starts running dishonest ads that make it sound like there are strong protections guaranteeing its additional revenue for education won’t be hijacked by “Sacramento politicians.” It has no such protections, and “Sacramento politicians” control what it is used for. Ridiculously enough, this phony spiel is a carbon copy of the central pitch for Prop. 38, which actually does try to ensure its additional tax revenue doesn’t go to teacher pay raises. So Prop. 30 is trying to piggyback on Prop. 38 ads and create voter confusion.

Unsurprisingly, Prop. 38 sponsor Molly Munger says this is lame and promises TV ads that lay out the differences between the two measures.

And the Prop. 30 folks say, “Shame, shame, shame!” This is from the L.A. Times:

“If you launch these Prop. 30 comparison attack ads, you will be the second Munger spending millions against our students and schools,” the letter states. “In the end, the Munger family could be known as the millionaires who destroyed California’s schools and university.”

Munger has invested $31 million of her own money for the Yes on 38 campaign. Her brother, Charles Munger Jr., has dumped $22 million into a committee aimed directly at taking down the governor’s tax-hike plan.  

I was relieved to see Molly Munger wasn’t buying this garbage. Instead of holding the moral high ground, the pro-Prop. 30 campaign is pure puke politics, as Bill Lockyer would say if had one of his occasional candid spells, and he was willing to take on the CTA, not a lousy governor on the verge of being recalled.

But, really, what else are Prop. 30 folks going to do? They can’t tell the truth about California, or anything close. So what do they do? They lie. And they take school kids as hostages. Classy bunch.

CalWatchdog contributor Chris Reed was on “Which Way, L.A.?” on KCRW on Thursday to talk about why Propositions 30 and 38 deserve to fail.  KCRW is one of the most popular NPR stations in the nation.

Reed was in a broad discussion with journalists and some prominent defenders of the education status quo — and he got a faintly sympathetic treatment from Evan Halper of The Los Angeles Times, who requoted one of his potshots at Prop. 30.

Listen here.

By Wayne Lusvardi

Local school boards in California are going through their annual Kabuki dance ritual claiming there will be teacher layoffs unless Gov. Jerry Brown’s or Molly Munger’s state tax hike propositions are passed by the voters.

But it might be Obamacare, now redefined as “ObamaTAX” by the U.S. Supreme Court, that may compel middle class voters to nix any state tax increase initiatives on the ballot in November.  Shifting tax increases onto wealthy households under Brown’s tax proposal will only result in a downturn in the economy that, in turn, will show up in a self-defeating decline in tax revenues. And shifting a state tax increase on nearly everyone else under Munger’s initiative will stand even less chance of voter approval with the ObamaTAX about to kick in around 2014.

A 10 Percent Tax Hike for a 2 Percent Population-Inflation Increase?

In Pasadena, the school district’s chief financial officer, John Pappalardo, states, “Pasadena schools will be pressed to find $8.2 million in additional savings if voters reject tax proposals by Gov. Brown and Pasadena attorney Molly Munger.”  But this omits the fact that Brown’s tax proposal would raise the state budget revenue by 5 percent and Munger’s by 10 percent, when population and inflation combined are only projected at 2 percent at best.

Demographer Dowell Myers of the University of Southern California has forecast only a one percent statewide population increase for 2013. This assumes there will be no flight of businesses and residents out of the state due to the roll out of higher green power rates and Cap and Trade pollution taxes on all large industries and utilities starting in 2013.

And the U.S. Federal Reserve has forecast that monetary inflation will run from 1.2 to 2.0 percent in 2013. Since public schools are tax-exempt, the 1 percent inflation forecast is probably more appropriate.

This means that voters will be asked to approve new income and sales taxes that are 3 percent to 8 percent higher than population and inflation increases combined.  Gov. Brown’s tax hike would shift this on sales tax payers and on wealthy households making $250,000 or more.  Munger’s tax proposal would tax everyone — except the poor making $14,300 or less per year.  So Munger’s tax proposal would hit the working and middle class, as well as those in upper income levels.

What these tax increases would partly pay for would not be retaining core teachers but school support staff.

Non-Essential Positions Only At Issue

Proposition 98 already guarantees public schools 43 percent of the state budget. The Pasadena School District got along with a state budget of $87 billion in 2012 without cutting core teachers and arguably can do so again without core teacher layoffs.

What really is at issue of being cut in the budget are non-essential personnel such as teachers’ aides, pre-school teachers, bus drivers, art teachers, librarians, dentists, and Indian education center personnel.  Non-essential personnel are called “categorical personnel” under the state budget.

Crying Wolf

Pasadena School Board President Renatta Cooper, herself a former pre-school teacher, claims: “The budget means larger classes, means fewer support services, and it reflects a continual erosion of [state] support for public education.  I don’t know where it ends.” she said.  Neither did Cooper mention that in 2010 Pasadena voters rejected a school parcel tax despite school district claims of core teacher layoffs that never resulted.

Cooper also doesn’t disclose that it won’t be core teachers that would be cut.  It would be non-essential personnel.  And it is not clear whether proposals such as lessening the school year by 5 days and cutting the number of hours of special education teachers’ aids could absorb the cuts.  The Pasadena District claims it would need to cut $7.3 million out of its $257 million total budget in 2011, or about 2.8 percent of its total budget.

In 2009, State Assembly Bill ABX-4-2 slightly cut funds for non-essential “categorical” personnel.  It also shifted responsibility for deciding what gets cut to the local school board level.  This greater flexibility saved public schools from having to cut art or music teachers or librarians if they could find cuts elsewhere.

PUSD Board Chairwoman Renatta Cooper needs to stop looking for more state funding to avoid having to make those hard decisions now delegated to local school boards.

ObamaTAX will be on Minds of Voters

With Obamacare, now ObamaTAX, costing $6,000 per person per year in 2014, there will be less money for non-essentials, including non-essential positions in public schools.

Imposing a state tax hike on the wealthy avoids the problem that taxes are fungible.  They shrink the private economy beyond merely high-income earners. They take jobs away from the private sector and transfer those jobs to non-essential school personnel.  Certainly, public education is a high priority in society. But is a teacher’s aide, school librarian, or pre-school teacher more important than a job trainer, venture fund manager, or innovation engineer as described in Edward Conard’s new book “Unintended Consequences: Why Everything You’ve Been Told About the Economy is Wrong?”

And who is to guarantee that such tax increases won’t go to pensions or health plans for retirees that have not been reformed?  Are we really worried about loss of health care benefits to teacher’s aides or pre-school teachers when ObamaTax will cover it?

There are seven new taxes on people earning less than $250,000 under ObamaTAX. With this looming over their heads, why would the middle class vote for a mostly unneeded and excessive increase in the state income tax and sales tax?  Once again, even if this tax is shifted to only the wealthy, that just takes jobs out of the private sector with no compensating rise in home values or property tax base.

Home and neighborhood values are no longer automatically benefited by proximity to public schools due to their decline in academic performance and uncoupling from neighborhood control.  There will be no likely discernible loss to property values or the tax base if Gov. Brown’s or Molly Munger’s tax proposals fail at the ballot box. And with ObamaTAX we are likely to get long-term economic stagnation, as young adults no longer will have disposable income for home down payments or small business loans. Fully funding non-essential personnel in the public school system is probably not on the mental radar screen of most of California’s middle class with ObamaTAX looming ahead. Shifting a mostly unneeded tax hike on the wealthy is also unlikely to fly with voters because there is little social dividend.

In political Kabuki dancing the dancer always dances with a mask on.  One should be aware that in political posturing over taxes in California that tax proponents also wear masks that the taxpayers need to look behind them.

By Wayne Lusvardi

Deregulation got a bad rap in California ever since it was wrongly blamed as causing the Energy Crisis of 2001 and the San Diego Blackout of 2011.  But a new study by the Rand Corporation, titled “Deregulating School Aid in California: How Districts Responded to Flexibility in Tier 3 Categorical Funds in 2010-11,” reports that deregulation saved public schools in California from 2007 to 2010.

Starting in 2007, the California legislature under Assembly Bill ABX-4-2 deregulated $4.5 billion in school district budget “earmarks” at the same time they cut overall school funding.  It worked!

Most of the formerly politically earmarked money was shifted into the general fund of local school districts to protect core teachers from layoffs and was not used to pad administrative salaries.  Neither did unions or parent groups dominate the decision making over these “flex” funds.  The only exception was the Los Angeles Unified School District (LAUSD), which tried to protect district administration costs, according to the Rand Corporation report. And deregulation did not disproportionately affect programs for high-need students, despite hysteria that it would.

The Rand Corporation surveyed chief financial officers from 921 school districts across the state.  Rand found that the change in all school revenue sources including earmarks from 2007 to 2010 was a reduction of 7.7 percent, reflecting $846 per student.  This has to be put in context that the K-12 school budget grew by $1,746 per student, or over 20 percent, from 2006 to 2007 during the Housing Bubble.

Tier 3 Categorical Programs: Political Pork Earmarks

What the legislature deregulated was what is called “Tier 3 Categorical Programs.” This is a bureaucratic sugar coated term for low priority political earmarks or restricted funds.  By restricting the funds for special purposes, state legislators bought votes and political patronage from the beneficiaries.  Another term for “categorical” funds might be “political pork.”  Pork is a term deriving from when salt pork was distributed in barrels to slaves prior to the Civil War (Safire’s Political Dictionary).

The California Education Budget includes three tiers of “Categorical Funding” in descending priority as shown below:

CATEGORICAL STATE SCHOOL FUNDING (Source: Rand Corp.)

In other words, in the Tier 3 category, funds were specifically restricted to targeted beneficiaries: building trade workers, school psychologists, art and music teachers, Indian tribes, dentists, physical education instructors, etc.  By restricting the funding to these groups, their salaries became politically protected from being cut back by local school boards.  Interestingly, teacher dismissals were one of the least funded items in the Tier 3 category.

From 2007 to 2009, local school districts widely claimed in the media that core teachers and arts and music teachers would be laid off if categorical funding were cut.  But according to the Rand report, no core teachers were affected by deregulating categorical funding.  And whether art or music teachers were laid off was a decision of local school districts that had to decide between, say, art teachers and staff mentoring or deferred building maintenance.

Deregulation did not cut the total apportioned $4.5 billion from Tier 3 Categorical programs.  It only cut about 20 percent of Tier 3 funding, thus reducing the total funding level to $3.62 billion. And instead of protecting funding levels for “pet” programs that state legislators could buy votes with, it merely made the remaining funding discretionary.  Local school districts, not state legislators, could choose what to do with the funding.  Categorical programs exist so that state legislators can claim that they “brought the bacon home” to their local constituents.

Where Did the Savings Go?

According to the Rand report, most of the cost savings went into shifting funds into the general fund of school districts to remain solvent after the state budget crisis resulted in state funding cutbacks.

Gov. Jerry Brown has proposed expanding deregulation of categorical funding for public schools to $7.1 billion of the state school budget.

Deregulation has gotten a bad rap in California. But it might be a partial alternative to raising taxes, as proposed by Gov. Brown and billionaire Molly Munger in their initiatives for November 2012.

By Wayne Lusvardi

An opinion poll might tell you if a majority of the public wants higher taxes.  But it cannot tell you if higher taxes are needed.  Nevertheless, the mainstream media only want to report what opinion polls say people want, while ignore if the tax is needed at all.

A case proving that the media prefers to report opinion to reality is a University of Southern California Dornsife College opinion poll conducted last month. That poll reportedly found 64 percent of those polled supported Gov. Jerry Brown’s proposed $7.1 billion tax increase package.

A second poll just conducted online by USC found 63 percent favored the governor’s tax, supposedly “confirming” voter support.  Such a nearly identical result should be a red flag that the polling questions are designed to get a desired outcome.

The Dornsife College poll is the same outfit that in April 2011 reported “Californians support tax hikes to help close budget gap.”  Upon further investigation into the polling methods and results, only 9 percent of those polled actually indicated they wanted a “tax increase.”

So it is no surprise that the USC poll once again reports public support for a tax increase.  What has changed since last year, however, is that Brown recently has personally reported that the California Gross Domestic Product  increased by $90 billion in 2011.  If confirmed, that would indicate a whopping 4.74 percent increase in GDP.

That should generate at least the $7.1 billion in extra taxes that Brown wants to raise with a tax rate increase. An alternative tax rate increase proposal by billionaire Molly Munger would raise about $10 billion in taxes annually. But neither tax increase would be necessary if GDP has increased by $90 billion.

California lost about $4.5 billion in sales taxes when the temporary 1 percent sales tax increase expired in July 2011. The temporary sales tax increase was authorized under Assembly Bill X-3-3 in 2008.

A recent report from the California Controller John Chiang indicates, however, that tax revenues were down in by 22 percent in February 2012 from February 2011. How could the GDP be rising by $90 billion and tax revenues have declined?  This is a mystery that the media apparently do not want to investigate.

Several factors could explain the drop in tax revenues beyond the loss of $4.5 billion in temporary sales taxes, even though GDP has increased, such as: the flight of industriesto other states and countries due to the new Cap and Trade rules and high taxes; the impacts of monetary inflation from federal stimulus policies; underreporting tax receipts; or some other as yet unexplained reason.

The California Legislature recently gave up $2 billion in property tax revenues from redevelopment agencies for affordable housing.

Opinion pollers want to report the forest and the average citizen wants the number of trees reported. The trees represent so many real cords of wood of definable quality. But the forest is hard to define. California opinion polls can no longer tell the forest from the trees or opinion from reality.

By John Seiler

Our friend Ben Boychuk of City Journal California writes an incisive analysis of how Gov. Jerry Brown’s $9 billion tax increase initiative is being challenged — by a $10 billion tax increase from his Left. Ben:

Jerry Brown wants Californians to believe that the state, facing a current budget deficit of $9 billion, has a revenue problem. In fact, what the 30 million residents of the Golden State have is an entitlement problem. From health care to state and local public-employee retirement benefits, Californians face as much as $500 billion in unfunded liabilities for pensions alone. The state’s unfunded health-care liabilities top $62 billion.

Brown’s new budget actually proposes a 7 percent increase in spending, though it offers to cut some services. All of the governor’s plans assume that substantial, voter-approved tax hikes will provide billions in new revenue, helping to pay for the extra spending and shrinking the deficit. “I’m promising wine and roses,” he told reporters after a speech last month, “but not in 2012.”

Read the rest here.

Ben titled his analysis, “Guns and Roses,” a take on Brown’s phrase; also a reference to the rock group that was based here. Speaking of which, here’s a YouTube of G ‘n’ R’s “Welcome to the Jungle,” which describes California’s tax climate, especially the lines, spoken by the governor and Left-tax increaser Molly Munger:

In the jungle, welcome to the jungle
Watch it bring you to your kn-kn-knees, knees
I wanna watch you bleed