Peter Schrag: Jerry Brown helped create the tax trap that now ensnares him

Special to The BeeOctober 3, 2012 

Among Sacramento wonks the conventional wisdom long held that attorney Molly Munger's Proposition 38 could kill Gov. Jerry Brown's Proposition 30.

Both call for new taxes. Both are to benefit schools. Both are complicated.

That, goes the theory, will generate enough doubt and confusion to lead voters to reject both.

The latest polls reinforce earlier findings that Proposition 30 is a cliffhanger and that Proposition 38 will lose, despite the nearly $28 million that the deep-pocketed Munger, a longtime civil rights activist, has pumped into it. That's not surprising. Munger proposes to tax you and me.

Brown wants mostly to tax only the man behind the tree.

Brown had been selling his initiative – an increase in income tax for people earning more than $250,000 a year and a quarter-cent boost (roughly 3 percent) in the sales tax – largely on the terrible things that will happen to schools and colleges if it doesn't pass. In recent weeks he has gotten lots of advice on ways of making the pitch more positive.

Munger's measure would raise taxes on a progressive scale on all but the lowest incomes – initially a total of some $10 billion a year – and, unlike Brown's, would put most of it into K-12 schools and preschools.

Brown's initiative – which would generate an estimated $6 billion annually – would repay some of the money the state owes schools under the school funding formula in Proposition 98, thus lowering the debt. It would also avert some trigger cuts to funding for the University of California and California State University.

Because Proposition 30 would raise the base of K-12 and community college funding, the Proposition 98 formula would put all K-14 education on a better financial footing in the future. Still, given the deep cuts of recent years, it doesn't make things much brighter. Mostly it restores an inadequate status quo.

But for conscientious voters concerned about the dismal state of school and college funding in California, there's also a strategic question. Vote for one, vote for both, or vote for neither?

Some Sacramento wonks accuse Munger, the daughter of Charles Munger, who is, among other things, the billionaire partner of Warren Buffett, of spending her millions on a destructive ego trip. Brown, they argue, faces enough handicaps – the belief of great waste in state spending, particularly – without Munger muddying the waters.

As long-term policy, Proposition 38 probably makes more sense.

It tries to re-engage all Californians in supporting an essential public good. Its revenues are not pinned as much as Proposition 30 to the spikes and troughs of high-income dividends and capital gains. But Proposition 38 would not prevent the $1 billion in automatic funding cuts to the state's universities that would be triggered by the failure of Proposition 30.

If it should pass, however, Brown's initiative will probably end the chance of anything better passing for perhaps another five years, even as it leaves the schools and universities with insufficient funding.

It's also likely to reinforce the belief in rampant waste. "We just gave the schools all that money. How come they still stink?"

In essence, Proposition 30 offers a choice between bad and awful.

Which brings us to the question of the alternatives in November.

In the highly unlikely event that both the Brown and Munger measures pass, the one with more votes goes into effect. The other does not. And since the Munger initiative has little chance of passing, it could be regarded less as a spoiler for Brown than an incentive for voters who do not want to be hit with an income tax increase to vote for Brown.

In August, four leaders of the California Democratic Party – U.S. Sens. Barbara Boxer and Dianne Feinstein, Assembly Speaker John A. Pérez and state Senate President Pro Tem Darrell Steinberg – wrote a letter to the state PTA, a major backer of the Munger initiative, urging it to stop bad-mouthing the Brown measure.

In fact, for some months now, as PTA President Carol Kocivar pointed out in her response, most of the sniping has gone in the other direction. She politely reminded Boxer et al. that, unlike some of the shots that backers of the Brown measure took at Munger, neither the PTA nor, to the best of her knowledge, any of the other groups backing the Munger initiative had come out in opposition to Brown's proposal.

Early on in this campaign, Munger had said that she hoped Brown would talk positively about both proposals.

She might also have said that if Brown had been smarter and bolder when he ran in 2010, he would not have promised to support no tax increase that had not been approved by the voters.

He might then have begun his term with more leverage in the Legislature in negotiating a compromise to quickly put his tax proposal on the ballot without going the initiative route. It might even have been a better proposal.

The Tribune is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

Commenting FAQs | Terms of Service