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.