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Prop 30 tests budget future, Brown legacy

5:17 PM, Oct 23, 2012   |    comments
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When California voters head to the polls on November 6, they will be faced with a fiscal gut check at the very top of the statewide ballot: a multi-billion dollar tax increase, already assumed as part of the state's budget.

Its fate may say a lot about the future of schools, the state's finances, and the political legacy of California's iconoclast governor.

Proposition 30 places squarely in front of voters the question Gov. Jerry Brown has been trying to ask them since he took office in 2011: are additional tax dollars the only way to shore up the state's finances?

"Proposition 30 is the way forward by which we pay the bills that will provide our future," Brown told a crowd of community college students in Sacramento on Oct. 18.  "When the whole pot of money gets smaller, then everything gets cut."

But Brown has faced a number of policy and political hurdles, and polls have continued to show that his effort is probably headed for a nail biter of a finish on Election Night.

For starters, there are the policy hurdles.  Prop 30's revenue -- temporary hikes in income taxes on the most wealthy and sales taxes on everyone -- would be sequestered into a special account for K-12 schools and community colleges, but the budget allows that money to be counted towards the long-standing school funding guarantee.

Translation: it would allow billions of other state tax dollars to then be redirected to other programs, from prisons to human services and beyond.

"Proposition 30 is meant to fill this tremendous hole that we've had by the cutbacks over the last 10 years," said Brown in a recent one-on-one interview.

And yet, the political campaign -- from the apple-shaped logo to the TV ads -- focuses almost exclusively on schools.

"It's not intellectually honest," says Jon Coupal of the Howard Jarvis Taxpayers Association, an opponent of Prop 30, on the governor's campaign.

While the additional tax dollars may be linked to much more than the finances of public schools, Prop 30 is almost solely linked to education in a different way: $6 billion in looming budget cuts should Brown's initiative be rejected.

Those cuts, the vast majority of which would come from both K-12 and higher education, are set to automatically take effect if Prop 30's taxes don't materialize.  And while some legislators have privately hoped that an election defeat would mean they could return to redirect the budget ax, Brown has continued to insist that he will not agree to a do-over of those "trigger cuts."

"I'm not going down that road," said Brown in the recent interview.

Prop 30 also involves other policy choices, not readily visible in the heat of the general 'tax or no tax' campaign.  For example, the initiative's most long-lasting impact is to codify 2011's state-local realignment plan in the state constitution.

That includes a dedication of the state's existing sales taxes to local social and public safety programs.  As Legislative Analyst Mac Taylor pointed out at a recent public policy forum, that also means taking a relatively stable source of revenue -- sales taxes -- out of the budget, thus making general programs even more reliant on the volatile personal income taxes which have helped fuel boom and bust cycles over the last decade.

And it took a lot for Brown's tax hike to even get to the ballot.  After months of private negotiations in late 2011, the governor was unable to dissuade all of his potential tax rivals from qualifying their own initiative, and also unable to convince the state's business community to sign on as formal supporters of Prop 30.

And that's to say nothing of the legislative action, still being challenged in a state court, to move Brown's initiative to the top of the ballot -- a marquee spot that could keep weary voters from skipping it as they plow through 11 propositions.

Is Prop 30 a defining moment for Jerry Brown's political legacy? The governor is having none of that talk, that's for sure.

"At the end of the day, Proposition 30 is not about any one person," said Brown in the interview.  "I'm more interested in California being successful."

Below: the full interview with Gov. Brown, on a variety of subjects, conducted on Oct. 18 in his Capitol office:


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