CSBA: Vote for both tax plans

The state PTA backs the tax initiative financed by civil rights attorney Molly Munger; the California Teachers Association and the Association of California School Administrators endorsed the governor’s initiative. This week, the California School Boards Association decided to support both.

On Sunday, at the urging of CSBA’s board of directors, school board members in the Delegate Assembly voted 129-79 to encourage their constituents to vote for both tax proposals that will appear on the November ballot. They did so after an hour-and-a-half debate and after defeating, by voice vote, an amendment calling for CSBA to support only Munger’s “Our Children, Our Future” initiative. There was no motion to support only “The Schools and Local Public Protection Act of 2012,” which Gov. Jerry Brown and the California Federation of Teachers are sponsoring.

“We are facing a nuclear winter for funding for public education,” said CSBA Vice President Josephine Lucey, a school board member from Cupertino. “Districts cannot absorb more cuts and provide a decent education.” Delegates decided it was smartest to back both initiatives, Lucey said, after concluding, “Why should we be fodder for a fight” between the two tax campaigns or the anti-tax Howard Jarvis Taxpayers Association, which would play up its opposition to one of the tax plans.

Brown’s tax plan was favored by a slight majority, 54 percent, in a poll last month by the Public Policy Institute of California, while Munger’s drew only 40 percent support in that voter survey. But Munger’s plan would provide substantially more money for K-12 schools, so it came down to a difference between “the purists and the pragmatists,” said Frank Biehl, president of the East Side Union High School District school board and a delegate from Santa Clara County. “One side said Munger’s would bring more money for a longer time with more flexibility. The other side said, ‘It’s not going to pass so what difference doe it make?'”

Biehl, who plans to vote for both, said another factor was that the CSBA didn’t want to cut off dialogue with Brown, who has met with the board of directors and responded to their concerns, such as changing his plan for a weighted student formula.

Both initiatives are expected to qualify for the ballot. Brown’s tax plan would raise between $6.5 billion and $9 billion by raising the sales tax ¼ percent for four years and the personal income tax between 1 and 3 percent for seven years on those earning more than $250,000. But most of the money would go toward shoring up the General Fund, with $2.9 billion going toward Proposition 98 next year; Brown would commit that to repay part of  $9 billion in deferrals, late payments to school districts.

Munger’s initiative would raise $5 billion in 2012-13 and then $10 billion for 11 years by raising the state’s progressive personal income tax less than a half-percent for lowest earners up to 2.2 percent for those earning more than $2.5 million. In the first three years, her plan would pay off $3 billion in state bonds, freeing up money for the General Fund, with the rest going toward K-12 schools and early childhood education. After that, all of the money would go directly to schools, on a per-student basis, and early childhood programs.

If, against the odds, Munger’s initiative won and the governor’s lost, the Legislature could undermine it by separately manipulating the General Fund to decrease Proposition 98 funding for education. Brown and lawmakers have become adept at that. There would be disputes if both initiatives passed. The one with the highest vote total would determine which clauses applied in areas of overlap (the rates on the personal income tax); the courts would likely be called on to sort through other issues.

In its press release on Sunday’s vote, CSBA made a strenuous case for more school funding while expressing little enthusiasm for Brown’s initiative. Quoting CSBA Executive Director Vernon Billy, it said, “CSBA opted for the dual endorsement because schools desperately need funding.” Yet, he and the CSBA leadership want to make it clear to the public that the governor’s initiative does not provide new funding for schools. Instead, it bolsters the General Fund with new revenue.

“‘Under the governor’s plan, schools would get back some of the billions of dollars that were redirected away from them and used to shore up the state’s funding gap in the last budgetary cycle. The governor’s initiative only restores some of the funds already owed to schools,’” Billy said.

Polling looks good for Brown

It was a fine weekend for Jerry Brown. He should be elated with the first polling on his revised tax initiative. And the California Teachers Assn., a strong supporter of his first initiative, has come around to back the new version, too, and committed $9 million for the June and November elections. At least a piece of that’s expected to help Brown round up signatures to get the initiative on the ballot, though how much has yet to be disclosed.

Results of the USC Dornsife/Los Angeles Times poll of 1,500 registered voters show that 64 percent of voters back a temporary quarter-cent sales tax and higher income taxes on those making at least $250,000 ­– the compromise that Brown and the California Federation of Teachers agreed to earlier this month in merging their initiatives; 33 percent of those polled opposed it. Democrats were predictably for it (80-16) and Republicans agin (38-61); however, Brown did surprisingly well with independents, three-quarters of whom said they support the initiative, with 23 percent opposed.

Voters were told the money – $7 billion to $9 billion – would go toward public schools, community colleges, services for children and older adults, and local public safety, in line with the new initiative’s title (the School and Local Public Safety Protection Act of 2012) and summary. Brown can claim that because, while the revenue will go to the General Fund, a portion will go to K-12 and community colleges through Proposition 98, while $2 billion will support realignment, in which counties will permanently take responsibility for some social services and prisoners transferred to county jails.

The poll was taken in the days immediately after the deal between Brown and the CFT, but before the teachers union decided to stop collecting signatures for its Millionaires Tax, so pollsters asked about that one, too. CFT proposed a permanent, higher tax, though only for millionaires.

CFT’s initiative outpolled the hybrid tax plan 69-27, 5 percentage points higher. But business lobbies had already come out against CFT’s plan and may have waged war against it, so Brown’s tradeoff – sticking with a small sales tax and lowering the rates on the wealthy – could prove smart if business groups end up sitting on their hands.

“Jerry Brown may have pulled off a coup. By convincing the teachers to drop their initiative, he ends up with a compromise that still draws big levels of support,” Dan Schnur, director of the USC Dornsife/Los Angeles Times Poll, said in a statement.

The strong poll results on the initiative would appear to contradict Californians’ ambivalence about paying any new taxes. Asked whether the state’s $9 billion deficit should be resolved through a combination of taxes and cuts, as Brown proposed, or just cuts, 49 percent said do both taxes and cuts, while 45 percent said cuts alone. Apparently, respondents feel OK about taxes as long as they’re not getting the bill. (A full 80 percent also favor a $1 a pack tax increase on cigarettes, which is on the June ballot.)

That sentiment is reflected in the apparent opposition to the other tax proposal that may be on the November ballot, proposed by civil rights attorney Molly Munger and backed by the state PTA. It would provide $11 billion to K-12 and early childhood education by increasing the income tax across the board, though most families earning less than $50,000 would pay a negligible increase. It polls the mirror image of Brown’s new tax, with 32 percent in favor, 64 percent against. (Munger and the PTA face the challenge of explaining to voters that the increase will apply to their net incomes, after deductions, not to their gross incomes.)

The  endorsement of Brown’s merged initiative by CTA’s State Council of 800 delegates was expected, but critical nonetheless.

In a statement, CTA President Dean Vogel called the revised plan “a responsible and progressive plan that requires the wealthy pay their fair share in order to close the state budget deficit, restore funding to schools, colleges and essential public services and put California on the road to recovery.” He promised to work “with other labor unions and community groups to quickly qualify this initiative for the November ballot.” That implies that CTA will fork over some of the $4 million to $5 million it will take to get 1.2 million signatures by mid-May.

The State Council will meet again in June, at which point it could agree to additional spending on the November election.

CTA’s a team player for Jerry Brown

The president of the California Teachers Association said Monday that in backing Gov. Jerry Brown’s tax initiative, the state’s largest teachers union is agreeing to “stay at awful” for now with the expectation that more money will flow again to schools in coming years. But if voters defeat the $6.9 billion tax measure in November, the CTA will fight Brown – and go to court if necessary – to prevent the governor from exacting disproportionate cuts to K-12 schools.

The 800-member CTA State Council on Sunday endorsed Brown’s plan to use higher taxes to increase the state’s General Fund over a rival plan from the California Federation of Teachers that would split among K-12 schools, higher education, and social services an estimated $6 billion to $9 billion from taxing millionaires. CTA president Dean Vogel estimated the governor’s plan got 70 percent of delegates’ support on a voice vote.

“The governor’s initiative is the only initiative that provides additional revenues for our classrooms and closes the state budget deficit, and guarantees local communities will receive funds to pay for the realignment of local health and public safety services that the Legislature approved last year,” Vogel said in a statement.

That’s only partially true. The governor is  proposing no additional money for the classroom, including not funding a 3 percent cost-of-living adjustment to which the schools would be entitled. Instead, Brown would use $5 billion in additional revenue to pay off deferrals, a form of short-term debt in which the state budgets money for schools one year but delays payment to districts until the next year.

The CFT proposal and a rival initiative by civil rights attorney Molly Munger, which CTA delegates did not seriously consider, would provide immediate increases in school spending. But Vogel said they wouldn’t  address the estimated $9 billion deficit facing the General Fund. The union’s taking the view that the financial crisis facing the state “is not just about schools but about communities” – and the need to protect preschool and the state’s university systems as well as heath and social services.

Brown’s tax would at least stabilize funding for schools, setting up the prospect for eventually repaying money to schools while building up the base for Proposition 98, Vogel said.

Brown’s plan would temporarily raise the sales tax by a half-cent and the income tax on upper-income Californians (those earning more than $250,000). If it fails, the governor would manipulate Prop 98 to impose an extra $2.4 billion cut in school spending. He would shift the burden of repaying school construction bonds from the General Fund to Proposition 98, keeping funding level while adding a multibillion-dollar expense.

Threatening schools with a $5 billion cut helps Brown sell the need for passing his tax increase, but Vogel said that the CTA would fight further tampering with Prop 98, in court if necessary.

Vogel told CTA delegates that the Service Employees International Union, the other big teachers union, will back Brown’s initiative, too, although the SEIU has yet to announce its decision. If true, that leaves the CFT the only school union holdout, with enough money to bring its initiative to the ballot but not enough to sustain a campaign. Munger, whose proposal to raise the income tax would raise $10 billion for K-12 schools and preschools,  has shown no sign of backing off putting  her competing plan on the ballot.

Vogel told Kevin Yamamura of the Sacramento Bee that the CTA would pony up an undetermined amount of money for the governor’s initiative, although the union is also facing a potentially expensive battle to defeat an initiative that would restrict the collection of union members’ dues for political campaigns. The CTA does not plan to ask members for a surcharge on dues, as it did to fight similar unfriendly initiatives  in 2005, Vogel said.

Call for one tax on November ballot

Later this week, Gov. Jerry Brown will get a letter from education and business leaders worried about the prospect of multiple tax initiatives in November. Their message: The only hope for addition to revenue is subtraction on the ballot.

But in calling for Brown to persuade sponsors of various proposed initiatives to coalesce around one initiative, the letter will ask Brown to bend as well. The signers favor combining higher taxes with “real structural reform” – an idea missing from Brown’s proposal for a temporary $7 billion per year sales and income tax increase.

“If there are multiple revenue-raising measures on the ballot, none are likely to pass. We can’t let that happen to our kids,” wrote Ted Lempert, president of Children Now, an advocacy group for early childhood education, in a note to a letter that he is circulating to like-minded leaders. Lempert is asking them to sign the letter by Thursday.

Ted Lempert of Children Now is asking education leaders and advocates to sign this letter that will be sent to Gov. Brown.
This is a draft of the letter that will be sent to Gov. Brown. Click to enlarge.

Besides Brown’s initiative, which a number of public employee unions back, there could be three to a half-dozen competing tax plans on the November ballot, several of which could be backed by well-funded campaigns. These include big taxes on millionaires and on oil production in California.

There’s general consensus that more than one tax initiative, splitting the votes of already tenuous tax supporters, would doom all to fail. As yet, at least publicly, there’s been no sign of compromise. But with time running short to start collecting signatures, negotiations for a deal would have to happen in the next few weeks.

Lempert is calling on Brown to lead the talks.

Lempert is a leader behind The 2012 Kids Education Plan. It calls for a $6 billion to $8 billion unspecified tax exclusively for early childhood education and K-12 schools. It also outlines broad elements of reform that it says should be part of any tax increase. They include lowering the super-majority requirement for passing local school taxes, simplifying the convoluted school funding system, and adopting “workforce reforms” (code for perhaps changing state teacher tenure and evaluation laws). The two-dozen organizations that have signed on to the Plan include two members of the Education Coalition – the Association of California School Administrators and the California School Boards Association; the Bay Area Council, representing Bay Area businesses, and United Way of Greater Los Angeles; the parents groups Educacy and Educate Our State; and advocacy groups Public Advocates and Education Trust-West (see related post by Ed Trust-West Executive Director Arun Ramanathan). Some of those groups are expected to sign the letter to Brown as well.

Brown is going to have to strike a delicate balance.

If he agrees to all of the key elements of The 2012 Kids Education Plan, the California Teachers Association may withdraw its support and money. But Lempert and others will counter that combining reform and revenue is the only way to get business executives and philanthropists to pony up for what promises to be an expensive campaign.  A proposition backed only by labor won’t win, they’ll argue.

(See summary of proposed initiatives.)
Here's a summary of proposed tax initiatives. Click twice to enlarge.

Brown’s tax plan would increase the General Fund, which faces a $13 billion deficit next year; only a piece of it would go to K-12 schools and community colleges (roughly 40 percent). Education advocates argue that a tax increase dedicated to schools has the best, if not the only, chance of passing, and have several recent polls to back that up.

The Our Children, Our Future initiative, sponsored by civil rights attorney Molly Munger and backed by the California PTA, would raise $10 billion exclusively for K-12 and early childhood programs by raising the state income tax,  hitting high-income earners the hardest.

But late last month, Munger indicated she’s sensitive to Brown’s dilemma and the state’s overall fiscal crisis. She submitted an alternate version of her initiative that would divert $3 billion of the $10 billion in new revenue for four years to pay down the state’s bond indebtedness. The effect would be to free up $3 billion in the General Fund to address the state budget deficit, without raising the obligation to schools through Proposition 98.

That’s the type of movement that all sides must show to head off defeat by circular firing squad in November.

Poll: Tax with ed reforms is winner

A new poll has confirmed what Ted Lempert, president of Children Now, and others in the 2012 Kids Education Plan coalition expected: An initiative coupling school reforms with a tax increase dedicated to education has a good chance of winning at the polls a year from now.

The qualifiers are important. Less than a majority of respondents said they would be willing to pay a general state tax increase to support state services, including education, but not exclusively for schools. A slight majority said they’d be willing to pay more if it’s exclusively for education. But that rose to two-thirds if paired with the general reforms that the Kids Plan has been promoting. They include giving local districts more control over spending decisions and the hiring and dismissal of teachers.

Neither a sales nor income tax increase drew a majority support when suggested as a new general state tax.
Neither a sales nor income tax increase drew a majority support when suggested as a new general state tax. Click to enlarge. (EMC Research)

“The reform piece is needed to bring folks together,” said Lempert. “It provides a clear path for voters.”

It’s also needed to pick up the financial support of the business community, which will be needed to sustain a long campaign against likely anti-tax opposition.

The Kids Education Plan coalition, which includes the Association of California School Administrators,

Support grew when the income or sales tax was proposed as a tax dedicated to education. Click to enlarge. (EMC Research)
Support grew when the income or sales tax was proposed as a tax dedicated to education. Click to enlarge. (EMC Research)

United Way of Greater Los Angeles, the advocacy group Education Trust-West, Bay Area Council, and San Francisco-based Silver Giving Foundation, commissioned the poll of 600 voters in mid-November by EMC Research in Oakland, a marketing and opinion research firm that has done polling on education issues. Lempert released a six-page summary of the results.

The coalition has not yet written its own initiative. Instead, Lempert has taken on the role of broker, trying over the next month to coax deep-pocket sponsors of several emerging tax initiatives to compromise on one proposal. And that includes Gov. Jerry Brown, who’s said to be days away from announcing a tax initiative that he has been working on with the California Teachers Association. When Republican legislators killed his plan to extend tax increases as part of this year’s budget, Brown pledged to go to voters in 2012.

Push for one tax initiative in November 2012

There is general agreement, based on past elections, Lempert said, that voters would find multiple tax measures confusing and turn them all down. “We are focused on getting one measure on the ballot,” he said.

Today, Los Angeles attorney Molly Munger and a nonprofit she co-founded, the Advancement Project, are expected to send their initiative to the Attorney General for vetting. It would raise $10 billion for preschools through high schools, primarily from the wealthy, by increasing the personal income tax by 1 percentage point. Last week, the Think Long for California Committee, led by billionaire Nicolas Berggruen, proposed government reforms and also a $10 billion tax increase by extending the sales tax to services while lowering the personal and corporate income taxes. Higher education would get half of the money, but preschools and early childhood programs would get none.

Besides differences in who would be funded, there are advantages and liabilities to both proposals. The personal income tax is volatile, so a broader sales tax would provide more revenue predictability. But businesses that provide services, from attorneys to nail salons, will fight a new tax. The CTA will likely oppose Munger’s plan, because it would not mix the new money with Proposition 98, which funds pay increases and health benefits. CTA has already condemned Think Long’s plan for wiping off the books about $14 billion owed to schools. Munger’s plan has elements of the reform favored by Lempert’s group, such as providing bonus money for low-income children and giving school sites more say over how money is used. But those reforms would apply only to new money, not existing Prop 98 funding.

Precise wording of the poll questions is important. A USC/Dornsife poll found that 64 percent of respondents said they’d be willing to pay more taxes to support education. There was no mention of making this tax contingent on reforms.

However, the EMC poll teased out the distinctions:

  • “A narrow 53% majority agree and 43% disagree with the statement The most important thing our schools need is more funding.” The support rises to 66 percent when framed, I would be willing to pay more in taxes for schools if it went along with significant reforms to our state education system.
  • Only 39 percent said they would favor, with 58 percent opposing, a 1% increase in the income tax to provide general fund revenue “for uses such as education, social services, public safety and corrections.” That rose to 55 percent supporting, 42 percent against, when proposed as a dedicated tax for education. (Poll respondents weren’t told that under the state’s progressive tax structure, those earning more than $300,000 would pay the bulk of the new revenue.)
  • 44 percent said they would favor, with 52 percent opposing, a ½ percent increase in the sales tax to provide general fund revenue. That rose to 61 percent supporting, 36 percent against, when proposed as a dedicated sales tax increase for education.

Lempert isn’t talking publicly about specific reforms that the coalition wants. Respondents were read a question citing four general reforms:

  • Create a revised K through 12 education funding system for California that gives control over spending decisions to local communities and educators instead of the state legislature;
  • Require complete financial transparency and accountability for all education spending;
  • Give local school districts more control over teacher hiring and dismissal decisions; and
  • Provide substantial new funding for California schools by implementing a fair, broad-based new statewide tax for education.

However, the pollster then got more detailed, asking respondents about specific ideas, indicating which changes the coalition is interested in:

  • 80 percent favored making it simpler to dismiss underperforming teachers while preserving their right to appeal;
  • 79 percent favored requiring local districts to adopt a comprehensive teacher quality plan governing the recruiting, hiring, training, and evaluating of teachers;
  • 74 percent favored requiring that teachers have four years of experience, instead of two, before receiving permanent tenure status;
  • 72 percent favored expanding access to quality preschool and early childhood education programs;
  • 72 percent favored requiring districts to create a teacher compensation plan, developed with public input, detailing the pay structure for teachers;
  • 66 percent favored setting a base funding level for each student, with more for high-needs students;
  • 59 percent favored allowing district tax measures (parcel taxes) to be passed by 55 percent majority instead of the current 67 percent;
  • 55 percent favored significantly increasing statewide education funding with a broad-based tax raising between $6 billion and $8 billion per year.

Ruth Bernstein, a principal with the pollster EMC, said that the 59 percent support for dropping the threshold for a parcel tax, while lower than other reforms, was higher than in the past. She said she interpreted the 55 percent support for an $8 billion statewide tax as a sign that voters want reforms if they are going to pass a tax of that magnitude.

“We are seeing heightened awareness about the need for more funding,” Bernstein said, “and awareness of structural changes that are needed.”

Initiative: $10B for K-12, preschool

An initiative that would raise $10 billion for K-12 education and preschools by raising the state income tax, primarily on the rich, will be submitted to the Attorney General’s office for review this week, the first step for placing it on the November 2012 ballot. The initiative would target low-income students, who’d get a larger piece of the funding.

The Advancement Project, a national civil rights organization that’s been active in California, is sponsoring the initiative. Its primary creator and financier at this point is Molly Munger, a wealthy Los Angeles civil rights attorney who co-founded the Advancement Project. The daughter of Charles Munger, Warren Buffett’s investment partner and vice chairman of Berkshire Hathaway, she says she and others will put up the millions of dollars needed to qualify and promote it. The California State PTA has already endorsed it exclusively – ahead of other tax initiatives for schools that are being floated about.

Despite a flagging economy and an unemployment rate stubbornly in the double digits, supporters of more money for schools say they’re heartened by recent polls showing Californians are disturbed by severe cuts to public schools and are willing to pay higher taxes. That includes one by pollster Mark Mellman for the Advancement Project that found that 57 percent of very likely voters would favor its plan, with a third of respondents opposed and 9 percent undecided, a result that “stunned” her and “suggests a once in a generation opportunity,” Munger said.

Last week the Think Long Committee for California, a tax reform group led by billionaire Nicolas Berggruen, also floated a plan to raise an additional $10 billion, but only $5 billion would go to K-12 schools and community colleges, and it would do so primarily by extending the sales tax to services, from car washes to attorney fees, while lowering the personal and corporate income tax rates.

The state’s 5 percent personal income tax raises about $50 billion; Munger’s plan would bring in an additional 20 percent by raising the rate an average of 1 percentage point. But it would keep the current system’s progressivity, so 92 percent of the extra money would be paid by families earning more than $70,000, with 50 percent, or $5 billion, coming from those earning more than $300,000, Munger said. For those couples with taxable income above $5 million, the marginal tax rate would rise 2.2 percentage points to 12.5 percent; they’d pay the most.

The personal income tax has fueled growth in state spending, but it’s a volatile tax, tied to the stock options and fortunes of a sliver of rich Californians. That’s why tax reformers behind Think Long want to broaden the sales tax.

Munger’s plan would take a different approach to leveling the roller coaster ride. Annual revenue that exceeds the increase in the average per capita income in the state would be set aside to pay down the state’s debt for school bonds, which accounts for about half of the state’s indebtedness, she said. That should free up money for future needs.

Money to follow the student

Between property taxes and the state’s general fund, about $45 billion funds Proposition 98 K-12 spending, so Munger’s plan would immediately boost money for schools by nearly 20 percent (community colleges would not be included) . However, the new revenue would go into a separate fund, protected from the Governor’s and Legislature’s subverting Prop 98 and finagling with its arcane rules.

Fifteen percent of the $10 billion would go toward supporting and expanding early childhood and preschool programs, which currently reach only 30 to 40 percent of qualified children, according to a summary of the initiative (the exact wording wasn’t yet available). The remaining 85 percent, or $8.5 billion, would be divvied up as follows:

  • 70 percent of the total in a flat grant per public school student, including students in charter schools, with middle school students getting 20 percent more than elementary school students and high school students getting 40 percent more – reflecting the higher cost of educating older students;
  • 18 percent would provide additional per capita money (about $670) for low-income students eligible for federal Title I aid;
  • 12 percent per student funding for instructional materials, school site technology, and teacher training.

The initiative will state that the new money is not to be used to increase school salaries and benefits; no more than 1 percent can be used for administration.

The money-follows-the-student formula, weighted toward the poor, combines elements of transparency and equity that school finance reformers have been clamoring for. Schools will be required to show how the extra revenue has been used, and the information will be posted on a state Department of Education website, Munger said; parents will then know if districts have heeded their recommendations on how the money should be used in their children’s schools, such as to restore arts, hire more teachers to reduce class sizes, expand STEM (science, technology, engineering and math) offerings.

Assemblywoman Julia Brownley, who chairs the Assembly Education Committee, has similar elements in AB 18, the main finance reform bill that will be worked on next year.

The initiative would begin the transformation, Munger said. “When the model is out there, it gives a push to change the larger finance structure without piling it all in one ballot initiative.”

Hers and Think Long’s are two of several education initiatives that could collide on next November’s ballot. Gov. Brown and the California Teachers Association have yet to announce  their plan to raise money for K-12. A proposal to tax oil and natural gas production, with money to K-12 and higher education, is gathering signatures.

Some tax advocates are hoping proponents will split their differences and put one initiative on the ballot that business, labor, and education reformers can agree on.

For her part, Munger said she’s open to talk in the next month and a half, while her initiative awaits the AG’s review. But she and supporters don’t want to substitute a progressive tax – the personal income tax – for a divisive, more regressive tax, she said. “We are pleased with a proposal that seems to be most reflective of what voters want to do this year,” she said.