(Editor’s Note: In Sacramento Tuesday, I participated on a panel at the California Taxpayers Association conference dealing with potential initiatives on the November ballot. At one point I was asked to discuss the chances of the Proposition 30 tax extension passing, if it makes the ballot. Below were my comments.)
The Proposition 30 extension campaign starts off with some clear advantages.
As you know the measure would continue the three upper income tax brackets for another 12 years and drop the sales tax component. The schools will receive the bulk of the money, but there will also be money set aside for the rainy day fun, Medi-Cal and other General Fund purposes.
Schools are popular with voters so the measure starts in good position. Income inequality will be a major issue in this coming election – you heard a lot about that during the state Democratic convention this past weekend – and proponents of the tax will emphasize that the tax is paid by the rich, the upper end income taxpayers.
The major advantage the proponents have, at least so far, is that there is no organized campaign against the measure. Even if a campaign comes into place once the extension initiative qualifies, how much will it raise to oppose the measure? Estimates are the teachers unions and their allies will spend around $50 million in support. They probably no longer have to worry about future declining revenue if the analysis of the coming Supreme Court decision in the Freidrichs v. California Teachers Association case is correct, that the union ultimately prevails.
Voter turnout could be a plus for the proponents. One reason they wanted to be on the November 2016 ballot is because of the higher turnout in a presidential election of Democratic voters and others who might be sympathetic to their cause. The unknown of a Trump candidacy, should he win the nomination, and its effect on turnout in California might also work in their favor.
Also a plus, undoubtedly due to pressure from the teachers unions, the anti-poverty property tax measure is not going forward that could have burdened the Prop 30 campaign if another major tax proposal were on the ballot.
In December, the Public Policy Institute of California asked if likely voters supported the Prop 30 extension. The response was 54% Yes, 41% no.
Normally, an initiative is stronger when it starts with more than 60% approval because the yes vote invariably goes down as the election gets closer. However, if there is little or no opposition campaign and a healthy support campaign then the mid-50s starting point could be enough to prevail on Election Day.
A key factor is the lack of knowledge by voters. Every year the Public Policy Institute asks voters to rank which of the four major items funded by the General Fund—K-12 education, higher education, health and human services, and prisons—gets the most money. Every year the voters get it wrong declaring that prisons rather than K-12 gets the most money. So, when 49% of those surveyed believe that schools should get the most money from the General Fund but only 15% realize that the schools do get the most money from the General Fund, this lack of knowledge can work in favor of those advocating for the tax increase.
There are, however, some obstacles for the proponents of the Prop 30 extension.
Proposition 30 was passed as a temporary tax. Just four years later advocates want to extend the tax. Will a public that is showing during this election cycle its skepticism toward government think they were hoodwinked? Or will they accept that the tax is still temporary but that it has to go on another dozen years?
Assuming things remain the same as the election nears, voters will hear that the budget is in balance and that the state has a surplus. Why does a tax have to pass?
There could be other tax measures on the ballot. There will certainly be other economic issues such as an increase in the minimum wage and the overall effect on the economy from these economic issues, including taxes, will be part of the election year discussion. There will also be a school bond on the ballot. Will both a school bond and a school tax effort confuse voters?
There will also be many local taxes on the ballot. For example, in Los Angeles there is destined to be a sales tax extension for transportation and there may be a tax to deal with the homeless situation. Voters entering the voting booth might rebel if they see a lot of taxes on the ballot.
Finally, and perhaps the biggest item to determine if the Prop 30 extension will succeed, is where the governor will position himself on the extension? He said time and again that he campaigned for a temporary tax in 2012. How will he define temporary? Is it still temporary if an end date is in the law but it has been moved back 12 years?
Recently, the governor said that the Prop 30 extension was flawed because it did not contain a provision to put money in the rainy day fund, an important mechanism the governor supported. Proponents of the initiative amended the measure to include provisions for the rainy day fund.
When informed of the amendment, the governor said, “It certainly removes the fatal flaw, and I think that’s a very positive development.” Then he stopped himself and said he would say no more.
It will matter what he does say when he chooses to talk about the Prop 30 extension again.