It is said that California is a harbinger for the nation. Since we’re having a national conversation about taxes for the wealthy, it’s natural that California would play a role in that conversation. But a difference of opinion in how to go about that conversation could result in a counter-productive disaster – or a bounty for the state, suddenly flush enough to pay for pressing priorities.
Yesterday, Gov. Jerry Brown penned an “Open Letter to the People of California,” announcing his intention to go to the ballot in November 2012 with an initiative that would raise revenues by roughly $7 billion annually. The revenues would be raised in two ways. One, with five-year tax increases on individuals making over $250,000 and families making over $500,000 a year; three new tax brackers would be created, with increases of up to 2% on income above $500,000. Second, Brown would impose a similarly temporary ½ cent increase in the sales tax. California just saw a one-cent increase in the sales tax expire in June, so Brown states correctly that even if this passes, “sales taxes will still be lower than what they were less than six months ago.”
Brown explained the need for revenues to ensure that the continued degradation of services in California stops. Last year, he tried to get legislative Republicans to provide the necessary votes for a 2/3 majority to get a tax increase on the ballot; this failed miserably. So this year, he will bypass the legislature.
The stark truth is that without new tax revenues, we will have no other choice but to make deeper and more damaging cuts to schools, universities, public safety and our courts.
That is why I am filing today an initiative with the Attorney General’s office that would generate nearly $7 billion in dedicated funding to protect education and public safety. I am going directly to the voters because I don’t want to get bogged down in partisan gridlock as happened this year. The stakes are too high [...]
This initiative dedicates funding only to education and public safety–not on other programs that we simply cannot afford.
On the last point, money is fungible, and any funds earmarked for education and public safety means that the General Fund won’t have to cut back on other areas.
You would presume that, with California’s governor coming out and endorsing a ballot measure to raise taxes on the wealthy once and for all, that the entire Democratic engine would be on board with the idea. You would be wrong. In fact, there could be as many as FIVE ballot measures on taxes, at least at the signature gathering stage, for November 2012. Billionaire Nicolas Berggruen has a group called Think Long with a reactionary ballot measure to reduce income taxes, extend the sales tax to services, reduce the corporate tax rate and somehow capture $10 billion annually. They certainly have the money to get that on the ballot. Civil rights attorney Molly Munger has a $10 billion plan to raise income tax rates on virtually everyone except the working poor. And a coalition of progressives, including the California Courage Campaign, the California Federation of Teachers and over two dozen other community groups, filed their initative today, called the California Funding Restoration Act, which raises its $6 billion annually only from millionaires, raising the income tax by 3 percentage points between $1 million and $2 million and by 5 percentage points about $2 million. This money, like most of the plans would be earmarked for public education, essential services, public safety and infrastructure. There’s a possible fifth initiative from a group of environmentalists led by Thomas Steyer, which closes a corporate tax loophole for $1.1 billion a year.
The history of California is that, when competing ballot measures on the same issue appear on the same ballot, it sows voter confusion and leads to a rejection of all of them. This could end up upsetting a clear preference for higher taxes on the wealthy from both the activist and the establishment communities.
But Rick Jacobs of the Courage Campaign says that his coalition filed their initiative because they believe it has the best chance for victory, based on extensive research they did throughout the year. “We did a lot of focus groups, 18 or something, and two rounds of polling, and we drafted an initiative,” Jacobs said in an interview. “We think people are ready to raise taxes, but they’re very cynical, and they’re ready to believe that someone rich is a millionaire, but they’re not convinced that half a million or 250,000 is rich. So we took the data and put together ballot measure that has best chance of passing.” Jacobs added that the lack of a sales tax increase in their initiative means that the average person stands unaffected. They also learned through research that swing voters don’t want the money to go to Sacramento, so they pay out to higher education and local services in their initiative, with the money held in a special account. And, unlike the Governor’s measure, theirs doesn’t have a sunset.
As for the fear that competing ballot measures will cancel themselves out, Courage has been in contact with both the Munger coalition and the Governor’s office. “We shared research with them. They came to their own conclusion,” he said. “I see all of us on the same side,” Jacobs continued. “I wish the governor had not done what he had done. Sales tax and $250,000 are a heavy lift. If one believes there’s a true movement around the 99%, ours is simple and direct.”
Just because the initiatives have been filed doesn’t mean that they automatically go into circulation. The state must create a title and summary for the bill before sending signature gatherers out into the field to collect signatures. The deadline for getting on the ballot in November is roughly the end of April, but title and summary won’t be completed until late January. That gives these disparate groups a couple months to find common ground.
And that is likely to be difficult. The California Federation of Teachers is a main sponsor of the progressive taxation ballot measure, and they certainly have the money to get on the ballot. So does the Governor, who you could easily see trying to strong-arm donors into only backing his initiative and steering money away from the others. Nicolas Berggruen is a billionaire and his initiative has the kind of centrist coalition that could easily bankroll something onto the ballot.
And aside from the jockeying over funding, there’s just a philosophical difference here. The progressive coalition believes their millionaire’s measure can pass, and that Gov. Brown’s cannot. “I’m glad the governor finally proposed something that includes some progressive elements. That’s a good thing. It’s too bad he did not choose real progress instead of a compromise,” said Jacobs.
One scenario Jacobs envisioned was one in which both his coalition’s measure and the Governor’s reached the ballot. “I’m not sure it would be bad,” he said. If they passed in tandem, you’re talking about $13 billion a year for California, enough to make a real difference in reversing the worst cuts of the Great Recession and creating bold new programs, like the funding of high speed rail or even a state-based health care system. “I could argue that with two of these on the ballot, it’s time to refund California. That’s a great thing,” Jacobs said.
But that’s not really the history of ballot measures in the state. If common ground isn’t reached, the multiple measures will invariably wind up in competition, even if they don’t conflict. And this hope of going around the minority veto on tax increases would be potentially undermined by differences of opinion.
More from KQED’s John Myers.




18 Comments

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I like everything but the sales tax the idea of going to the voters shows with a tax increase on the rich must strike fear in the wallet of every GOPer. If we win it shows popular support for taxing the rich what is needed is a special tax on businesses that move jobs or rich people who move out of the state before and for 5 years after this tax is done so the full amount of these 5 year tax increases can be collected.
They should hire OWS people to get the enough people to sign the petition to get this on the ballot I cannot think of workers who would be more motivated and motivated workers work harder:)
But how would Grover Norquist feel about all of this?
Like everything else in politics, economics, and wars, this leaves me speechless.
Fuck him.
X 1,000
Forbes has a map tool that tracks results to this sort of thing.
http://www.forbes.com/2010/06/04/migration-moving-wealthy-interactive-counties-map.html
Uh, no IMO. Well, I don’t think it would constitutional, and I know it would never pass, but IMO no even if it were and would.
You should’ve seen TDS last night, they did a segment on California’s direct democracy.
Interviewed a Democratic somebody in the state House or Senate (can’t remember now which) but that guy, THAT GUY I WOULD VOTE FOR IN A HEARTBEAT for President. Or anything else he ran for that I could vote for him on. Wish I could remember his name, but he was MY KINDA GUY. No bullshit, no careful weasel wording, just tells it like it is. Period.
John Burton. Click on second segment.
I lived in California long enough to see how recall elections can be used to undo regular elections and how referenda can be used in the worst ways to undermine what little good there is in representative democracy.
Thanks.
Ugh. I was wrong, he isn’t an elected pol he is Chairman of the D Party in California. I still liked the way he talked, but I take back my “I would vote for that for anything.” If he made it to Chairman of the D Party in a state the size of California, he’s almost assuredly like the D’s in DC.
Talks a good game though. Guess I should’ve learned my lesson about that from O in 2008 though. He talked a good game too, and I voted for him. I sooo want my vote back.
Uh. That’s something in a nutshell right there.
You make it sound like what the Courage Campaign did was a bad thing, when actually it’s smart, and sound thinking. A key is the comment about how people think earning a million or more makes you rich but not $250K or $500K. First of all, when that question is asked, rarely is it explained that the figure is net after deductions, including federal taxes. That leads people to think that it is folks (families often) who gross $250K or $500K.
While $250K may make you rich in many parts of the country, or in comparison to those who have suffered greatly in this near-Depression, in many parts of California it’s simply two relatively well-paid middle class types. We have prison guards and cops and municipal employees who make over $100K. Through in a spouse with an equivalent income and suddenly you can be grossing close to that $250K threshold, which again sounds like a lot of money…until you consider the cost of living.
Typical example: I live in a middle class So Cal community that I couldn’t afford to live in except I bought my house in 1978 for $82,500 with a $562/mo mortgage. Identical house next door has changed hands several times. Current owner, a lawyer/single mom, paid $677K (about 8 times what I paid). An older, smaller house than mine up the street sold a few months ago for $595K. Another, also smaller, for $585K. Fancy places? Not hardly. Tiny lots (25′ x 100′), very modest houses between 950 sq. ft. and 1100 sq ft. But…very low crime and good schools and reasonably freeway close.
There are two new houses being built across the street, each 3,000 sq ft crammed onto these small lots with a tiny backyard and nothing in front except a driveway and a couple of small planters. Price? $950K. People who will buy them: the wealthy? Not likely. Probably a 30-ish or early 40-ish couple with 1-2 kids and two decent middle class jobs. Rich by some standards but not by CA standards, standards that are recognized by lots of people. Ask the average CA family where Mom and Dad bring home a combined $80K if $250K a year is wealthy; they’ll most probably laugh.
I don’t think I did make it sound like what Courage Campaign did is a bad thing. I gave its founder ample space to explain his aims! I merely pointed out, without blaming anyone, that competing ballot measures often cancel each other out.
I believe Rick when he says the polling shows that his initiative does much better. That fits with common sense. Brown appears to be trying to get the business community on board with his measure, which doesn’t sound like a good idea to me.
David –
Wasn’t replying to you or criticizing your article. My reply was to tatere @13, whose comment made it seem like the focus group approach was somehow a bad thing.
Burton’s much, much, much better than his predecessor Art Torres. If I had a choice on who should lead the CaDems I could think of very few people who would be better than him
I’m probably getting a detail or two wrong, but he appointed a friend of mine to the platform committee to get a more progressive voice on what actually goes on the planks of the platform
Oh, and something else that I’m fuzzy on the exact details, but my friend was there, and somebody asked Jerry Brown a question. And Brown started giving a BS political non-answer, so Burton interrupted him mid-sentence and said something to the effect that that’s BS and here’s what you need to say and do