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Jan 28th
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What’s At Stake?

vote-smartProposition 30 proposes raising taxes to save public schools from more budget cuts

Over-packed kindergarten classrooms are just one example of the ways California public schools are tightening their resources to make up for budget cuts, but Santa Cruz County Superintendent of Schools Michael Watkins says that strategy can only go so far.

“Most of our revenue comes from increasing class size, but you can't just continue to add kids to a class to get more revenue,” he says. “It compromises the quality of our education.”

In the last four years, between $12 and $15 billion have been cut from the state's education budget. Those cuts came as major hits for public schools, but the problems trace back much further. 

For more than three decades, the state government has been unable to work out a way to adequately fund public education, beginning, most notably, with the passage of Proposition 13 in 1978. Prop. 13 capped property tax rates, which served as a substantial source of revenue for public education. The budget for public education continued to take cuts over the years and many believe that the current system is at a breaking point.

In order to circumvent the legislative logjam that has left the state with no alternative but to repeatedly make drastic cuts, Gov. Jerry Brown has put the issue directly to California voters in the form of Proposition 30.

If Prop. 30 does not pass, Watkins says public education will be in very bad shape. 

If passed, the measure would temporarily increase personal income tax on individuals with annual incomes over $250,000 and couples making more than $500,000 for the next seven years. It would also increase the statewide sales tax by a quarter cent for a period of four years. The measure is projected to raise $6 to $8 billion in the next budget year. If it doesn't pass, $5 billion in cuts to all the public schools' state budget would be automatically triggered.

Those automatic cuts include $250 million to the California State University and University of California systems, which would lead to tuition increases for students, shorter school years, and teacher layoffs, according to Assemblymember Bill Monning (D-27th District).

Monning says that Prop. 30 is a “fix—not a solution,” but that it is crucial for stabilizing the state's budget. He adds that the budget for public education has taken the short end of the stick for more than 30 years in California.

“We've cut to the bone marrow, and if we don't succeed [in passing Prop. 30], it's going to create further dysfunction in our communities,” Monning says. “The costs of our public education have gone up so high that we're creating an apartheid systems of those who can access higher education and those who cannot.”

vote ballotCome Nov. 6, California voters will face two propositions—30 and 38—that propose raising taxes in order to help fund public schools. If both pass, the proposition that received the most votes will go into effect. If Prop. 30 does not pass, $5 billion in cuts will be made to the state's public schools' budget. Monning believes that Prop. 30 is good policy: Paying taxes is all about fairness and equity, he says.

“Those who have benefited the most should pay their fair share,” he says. “Those who have been the most successful or the most fortunate have an opportunity to help the state in a time of crisis, and it is in everyone's self interest—from property values, to public education, to public safety, etcetera.”

However, adding to its challenges in passing is Proposition 38—a measure on the November ballot that directly competes with Prop. 30.

Prop. 38 proposes raising taxes on all Californians who make $15,000 or more annually and directs all new revenue exclusively to preschools and K-12, instead of into the state's general fund as Prop. 30 would. If both tax measures pass, the one that receives the most votes will go into effect.

Monning says that Prop. 38 looks good, but that it presents some problems because it is designated almost exclusively to K-12 education.

If Prop. 38 beats Gov. Brown's tax measure, trigger cuts would still occur for the public education budget and funding for other general fund-funded programs—such as health programs, social services and prisons—would suffer.

Some people, however, are concerned that the bulk of revenues from Prop. 30 would not be directed to public education and that it will place an onerous tax burden on small-business owners.

John Kabateck, executive director of the California branch of the National Federation of Independent Business, which is based in Sacramento, says business owners are already on hard times and that they are very skeptical of state officials' ability to put their money to proper use.

“There's no accountability in government, and they lack honesty and responsibility, according to the small-business owners we talk to,” he says. “They simply do not trust that their state government is going to help them fix these problems,”

Of the NFIB's 22,000 small-business owner members in California, Kabateck says 93 percent of them oppose Gov. Brown's tax measure.

Kabateck says Prop. 30 would directly impact many small-business owners because of the ratio of their income to their overhead costs to operate.

He says small businesses pay up to 35 percent more on their gross revenues than large businesses and that employees can cost them up to three times as much as large corporations.

These tax increases, he says, could cause many to close their businesses and make layoffs.

“The amount of money that they are making is not a lot given the earning potential of a small business,” he says. “It's terribly unbalanced. The governor calls this a 'Millionaires Tax,' but what he should be calling it is a 'Mom and Pop Business Tax.'”

To the contrary, Santa Cruz County Treasurer and former California Assemblymember Fred Keeley says a large portion of California small-business owners are in support of Prop. 30.

“There is a very large cohort in the business community—large corporations and small businesses—who believe that a well-educated work force, largely created by the public schools and the three legs of California's higher public education (community colleges, CSU and UC), is absolutely essential for them,” says Keeley.

He points out that having fewer highly educated workers narrows their selection of educated employees, drives up the cost of the work force, and causes employers to spend more time training, which also increases costs.

For his part, Monning says he is troubled that Silicon Valley businesses are making a priority of acquiring H1 visas for foreign scientists and engineers to fill their positions. He feels that this demonstrates that there just are not enough well-educated workers coming out of American universities.

As for the tax revenue from Prop. 30 not going toward public education, Keeley says Proposition 98, adopted in 1988, guarantees that 50 percent of all existing revenue, and 60 percent of all new revenue, must be dedicated to K-12 education and community colleges.

He calls that a “fail-safe mechanism that assures those funds will be spent primarily on public education ... Those are not subject to some other interpretation by governors or legislators.”

Keeley believes that Prop. 30, although not representing a full recovery for either the K-12 system or higher education, is a good down payment on reversing the trend over the last three decades of under-funding public education.

This trend has led many to be worried about the diminishing quality and exclusionary costs of public education.

Congressman Sam Farr (D-17th District), who supports Prop. 30, puts it this way: “California will remain a great state as long as our educational institutions are great.”

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