A New School Funding Measure; Trouble for the Split Roll?

Joel Fox
Editor and Co-Publisher of Fox and Hounds Daily

The school establishment is clearly nervous about the viability of the split roll tax increase plan. The California School Board Association is testing the chances of another tax measure for the 2020 ballot that could provide school funding. This measure would take the tried-and-true method of seeking voter approval by taxing “someone else” and avoiding having to do battle over the still warmly embraced Proposition 13.

The proposal would raise taxes on corporations making over $1 million by 5 percent (that’s over a 50% increase in corporate taxes) and increase the personal income tax for individuals making more than $1 million by 1.5 percent. The summary of the measure read to poll respondents highlighted the fact that the tax would fall on “wealthy corporations and individuals.” In other words, someone else.

The tax is geared to raise $11 billion annually. Perhaps not coincidentally, that is a similar amount that the split roll measure would yield raising property taxes on commercial property.

But the $11 billion under the corporate/income tax proposal would all go for schools. The split roll proposal would send 40% of the revenue to schools and 60% to local governments.

The poll reveals support from over 60% of voters, a figure not achieved by polls on the split roll. However, the poll listed school issues that would benefit from new money and where it might be spent. Nothing was stated about covering pension and health care budget items that are eating up school budgets.

While a stiff campaign is already forming to oppose the split roll, it is unclear what kind of opposition would be presented against a corporate and income tax plan if it becomes a reality.

The School Board Association has not decided whether to file the initiative for the 2020 ballot and will wait to see how much the legislature and governor add to school funding in the state budget.

Governor Newsom and others who are talking about reforming California’s tax structure could have problems with an income tax increase proposal, which would put a greater burden on the individuals who already fund the greatest portion of the general fund. In economic downturns, these taxpayers pay much less in capital gains and the state budget falls off a cliff. Newsom wants to change that situation, not enhance it.

The split roll property tax measure has already qualified for the 2020 ballot.

A spokesperson for the school boards indicated that both measures could co-exist on the same ballot. However, that position is contradicted by an analysis of the poll found on the School Board Association website which states, “the interplay with other measures on the ballot could have a substantial impact on voters’ attitudes and will be factored into further research.”

Of course, there’s no question the school establishment wants it all—new money from a split roll and revenue from a corporate/individual income tax increase.

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