Nov. 5 (Bloomberg) -- California’s Proposition 30, which would raise sales and income taxes, is sinking fast in the polls. Voters are realizing that the measure -- the heart and soul of Governor Jerry Brown’s plan to “save” California -- is just another cynically devised and promoted way to prop up the status quo.
The measure is slightly ahead, but dropping below the critical 50 percent mark, which is a trouble sign as Election Day approaches. Californians tend to vote for politicians who want to raise taxes, but are more conservative when it comes to direct tax increases.
As the Sacramento Bee’s Dan Walters wrote last week, state-government insiders are “turning their attention, however reluctantly, to the fallout should, indeed, voters reject” the tax plan. Brown says there is no Plan B.
He has been traveling around the state issuing dire warnings that he will have to cut education spending and children will suffer.
“I’ve never quite seen such a stark black-and-white issue in my life in government,” he said in an interview with the Associated Press. He spoke recently at an elementary school in San Diego that was surrounded by “Yes on 30” political signs in Spanish and English, and whose principal declared, “There’s nowhere left to cut.”
Yet the only reason that school funding is at risk for so-called trigger cuts is because the governor and Democratic legislators jiggered the budget to maximize the political message of Proposition 30. They built the budget around the assumption that it would pass, then “slashed” billions of dollars from education so they could warn about doomsday cuts.
“Many editorial pages failed to point out the brutal blackmail represented by the Prop. 30 strategy of creating a $5 billion hole in the K-12 education budget,” Chris Reed, a San Diego Union-Tribune editorial writer, wrote in a CalWatchDog article. “Now those editorial pages are saying the hole can only be fixed by voters joining Brown in pretending that Prop. 30 supporters hold the moral high ground.”
In fact, there’s little chance education spending will be dramatically reduced. “What we do know is that his allies in the educational establishment, especially unions such as the California Teachers Association, have no intention of meekly accepting the trigger cuts, even if most school districts have already built that worst-case scenario into their current budgets,” the Bee’s Walters wrote.
Brown was stung not only by anti-tax groups, but by a competing measure on the ballot, Proposition 38, which would increase the income tax on almost all Californians for a dozen years, mainly to finance public education, with some money also earmarked for debt reduction. The ad campaign for that initiative, which is backed by Molly Munger, the daughter of billionaire Charles Munger, showed money flowing out of a schoolhouse and into the greedy hands of politicians. The image stuck.
The Los Angeles Times criticized the governor last week for failing to settle on a “central sales pitch” for the proposition. But he has been pushed off-message after events of the previous few months highlighted state-spending outrages.
For instance, the governor warned that 70 parks would close to save $33 million, but then the Sacramento Bee uncovered $54 million in hidden parks-department accounts, with employees granting themselves improper vacation payouts. Brown was also blamed for agreeing to a pension “reform” measure that barely touched the problem of the state’s obligations to its public employees. And the more voters know about his high-speed train to nowhere, a plan that would cost billions of dollars, the more they realize that California’s government isn’t even cut at the flesh, let alone the bone.
There’s even doubt that the trigger cuts in the schools will be real decreases. Government agencies often complain about draconian budgets, when what they really mean is a reduction in the rate of spending growth -- a ploy in every campaign season.
“Even if the measure fails, funding for schools is expected to increase 21 percent from 2012 to 2015 because of economic growth,” according to a San Jose Mercury News analysis of the proposition. “Look at it this way: Say you’re expecting a $100-per-week raise at work. But then you don’t get it, and you tell your friends that you have to cut back by $100 a week.” That hardly amounts to the starkest choice in our lifetime, as Brown describes it.
A long-term look at California’s education spending published by Pepperdine University in 2010 confirms the Mercury News report. “In reality, total expenditures (excluding Capital Expenditures) have increased every year from FY 2003-04 through FY 2007-08, before leveling off in FY 2008-09,” wrote the researchers Steven Frates and Michael Shires. With capital spending included, total expenditures have gone up every year. Classrooms lost out as more money flowed toward administrative salaries and the school bureaucracy.
In a new study which looks at California’s overall budget numbers, Frates and Ian Rudge have found that state-government spending on public-employee pay and benefits grew three times as fast as the growth in personal income for all Californians. Had the state limited compensation growth to about 10 percent from 2005 to 2010, it would have saved more than $2 billion -- enough to avoid 25,000 teacher layoffs.
That’s more evidence that California has a spending, rather than a revenue, problem.
If Brown’s tax-increase plan fails, he vows to veto any effort to overturn the trigger cuts. Republican reformers in the Legislature, which is dominated by Democrats, say they have a better way: reducing the budget with changes such as prison outsourcing, real pension reform, elimination of needless agencies, and public-school competition.
Ever cynical, perhaps Brown knows that if Proposition 30 fails, he will have tried his best to sustain the status quo and will have nothing left to do but cut the government. That’s wishful thinking. Until California’s leaders become serious about cutting -- and targeting the right things, such as public-sector union benefits and privileges -- there’s little hope that California will break out of its downward cycle.
(Steven Greenhut is vice president of journalism at the Franklin Center for Government and Public Integrity. The opinions expressed are his own.)
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