What’s at stake in California’s Prop 30?

October 30, 2012

Todd Chretien analyzes the debate around a controversial California ballot measure.

GOV. JERRY Brown has put a gun to the heads of parents, students and teachers across California by threatening mayhem in public education if his Proposition 30 isn't approved on November 6. Thousands are responding by organizing to get out the vote in hopes the measure will blunt devastating attacks on public education.

If passed by California voters, Proposition 30 would raise state income taxes on incomes over $250,000 per year by between 1 percent to 4 percent, depending on the bracket--the new rates would be set at between 10.3 percent and 13.3 percent. The state sales tax would be raised by 0.25 percent. According to Brown, these taxes would raise approximately $7 billion per year over the next seven years, with most of that money to be dedicated to public education.

Brown has stated that if Proposition 30 fails, this would trigger more than $6 billion in immediate cuts to public education, from pre-school to the university system, including tuition spikes; teacher, professor and staff layoffs; larger class sizes; and tens of thousands of students denied access to higher education.

California Gov. Jerry Brown rallies support for Proposition 30
California Gov. Jerry Brown rallies support for Proposition 30 (Xueqiao Ma)

Recent polls show that support for Proposition 30 has fallen below 50 percent for the first time--the "yes" vote now leads by a very narrow margin of 48 percent to 44 percent.

The question that has to be asked is: Why is a measure mainly built around an increase in state income taxes on the richest residents facing defeat in a state where President Obama leads Mitt Romney in the polls by 24 points and the state legislature is dominated by the Democratic Party by an almost 2-to-1 margin?

There are several reasons.

IN THE spring of 2012, unions, student groups and community organizations initiated a ballot measure called the "Millionaire's Tax," which would have raised taxes on taxpayers with annual incomes over $1 million by 3 percent and over $2 million by 5 percent. The Millionaire's Tax proposal did not raise taxes at all on the poor and working class by means of the regressive sales tax.

In the wake of the Occupy movement, enthusiasm for this ballot measure, spearheaded by the California Federation of Teachers (CFT), began to grow. Polls showed the Millionaire's Tax with as much as 63 percent support among likely voters.

Brown wrote his own ballot measure, which combined more moderate tax increases on the wealthy with a 0.5 percent increase in the sales tax. Brown convinced the leadership of the Service Employees International Union (SEIU) and the California Teachers Association (CTA, the much larger teachers' union in the state, affiliated with the National Education Association) to support his proposal.

Together, Democrats and union leaders pressured advocates of the Millionaire's Tax into line, leading to a so-called "compromise"--what is now Proposition 30. As Socialist Worker predicted at the time, this maneuver killed much of the grassroots energy around a ballot measure to tax the rich and transformed the referendum campaign into a top-down, money-driven battle, relying on millions of dollars in television advertising.

This is a game the Republicans are better positioned to win. Brother and sister billionaires Molly and Charles Unger have personally spent around $40 million to defeat Proposition 30.

Still, even if Proposition 30 isn't based on a grassroots campaign, it still has the backing of all the state's major unions, student groups, progressive organizations and the Democratic Party. So, again, why is it so close?

Yes, the Mungers are to blame, but so is Jerry Brown. By insisting that Proposition 30 include a sales tax increase, even a small one, Brown allowed the measure's opponents to pose as defenders of the over-taxed poor and working class.

Advocates of Proposition 30 have rightly pointed out that around 90 percent of the new taxes will hit only the wealthy, and the sales tax represents only an additional one penny for every four dollars spent. However, a small regressive tax is still a small regressive tax--and it will disproportionately impact millions of ordinary Californians who are already at the breaking point. As the San Jose Mercury News described the situation, quoting the latest census figures:

More than 330,000 Californians fell below the poverty line in 2011, bringing the ranks of California's poor to more than 6.1 million...The statewide poverty rate hit 16.6 percent in 2011, up by 0.8 percent from the year before. A family of two adults and two children counts as poor if its combined income is less than $22,811.

The first point to make about these statistics is that a poverty line set at $22,811 for a family of four is a cruel joke. The average cost of 12 months' rent on a two-bedroom apartment in the Bay Area is more than that, never mind food, clothing, transportation and...taxes. So there are not 6.1 million poor people in California--there are more like 12 or 15 million poor people in California, and another 15 million or so who are just getting by.

All of those many tens of millions have been slammed over the past years by massive unemployment (which has run at between 10 and 12 percent statewide over the last three years) skyrocketing rents, collapsing home prices, rising health care costs and...increased taxes and fees of every conceivable sort: public transportation fares, bridge tolls, parking tickets, parcel taxes, fees for public school programs, higher tuition, etc.

All of this means that there are millions of ordinary Californians who can be convinced to vote against Proposition 30 because they are rightly sick of paying for the mess the millionaires created.

UNION, STUDENT and community backers of Proposition 30 correctly point out that many of the poorest people in California will gain much more than they lose under the measure, as schools will receive some additional funding and public higher educations costs will stabilize, at least temporarily. Personally, if Proposition 30 passes, I will have to pay far less in an increased sales tax (on average, workers will be hit with an increase of $40 or $50 per year) than the hundreds of dollars in additional fees to help my daughter's public school survive if the measure doesn't pass.

So for teachers, parents, students, professors and education staff, Proposition 30 is directly progressive. But for ordinary Californians without any connection to the education system, they will have to pay the equivalent of an extra month's electricity bill for nothing extra in services.

Millionaires will vote against Proposition 30 because they would pay more in income taxes. But if Proposition 30 fails, it will be because hundreds of thousands of poor and working-class people voted against it. There simply are not enough millionaires in California to tip the balance.

Millions of Californians will vote in favor of Proposition 30 despite the personal cost because they support public education and are sick about how it is being destroyed. But Brown and the Democrats are risking a defeat by adding the sales tax that could help the right mobilize a large enough opposition among working people.

There is another question as well: While Brown has asserted that if Proposition 30 passes, all of the funds raised will be guaranteed for use on public schools we have seen many times in the past how Sacramento politicians have gotten around such promises.

The larger point here is that Brown would rather lose Proposition 30 by muddling it up with a sales tax than win a purely progressive tax on the rich. Why? Because big business runs California, and the Democrats would rather bargain with them for marginal increases in taxes on the wealthy and corporations than lead a real fight to redistribute the wealth.

This is why Pepsico, Coca-Cola, Occidental Oil and other corporations have donated millions in support of Proposition 30. They can live with it as long as it heads off any greater challenges to their wealth and power.

Brown and the Democratic majority in the state legislature want to manage the crisis. They recognize, as Democrats often do, that the scales have tipped so far in favor of the 1 percent that it is beginning to threaten the health of the system as a whole. Brown's support for temporary and marginal tax hikes on the rich is part of his plan to overcome the budget crisis in order to make the state more competitive in the global market. He wants the rich to pay slightly more and act slightly more responsibly so that he can impose long-term, grinding austerity on the poor and working class.

Thus, while Proposition 30 will raise approximately $7 billion annually for public education over the next seven years, in September, Brown and the Democratic majority in the legislature--acting virtually in secret, with no input from labor--rammed through a massive attack on public employee pensions that will save the state approximately $65 billion over the next 30 years, by transferring the cost of retirement to workers and simultaneously guaranteeing profits for the speculators.

In other words, when added to the tens of billions of dollars already taken out of public education over the last four years, at best, Proposition 30 will fill in only part of the hole that has been dug.

MANY PROGRESSIVES will agree with all of this analysis. A lot of student and union activists are angry at Brown and their own union leaderships for abandoning the Millionaire's Tax. But they will rightly say, "The reality today is that if we don't work to pass Proposition 30, then we are guaranteed $6 billion in cuts on January 1."

This is a powerful argument and rings true with the vast majority of rank-and-file teachers, college students and parents. After all, when someone puts a gun to your head, your choices are limited.

So how could we do better?

SEIU and the California nurses' and teachers' unions have invested almost $20 million in passing Proposition 30. Imagine what could have been done with those resources if they had been dedicated to building a grassroots campaign to win the Millionaire's Tax--or to building public support for real contract fights and strike action if needed, just like teachers did in Chicago.

Instead, teachers in Los Angeles and San Francisco have accepted concessionary contracts, and teachers in Oakland are working under terms imposed by administrators. The picture is similar across the state. The Democrats have demonstrated time and time again--from President Obama and Education Secretary Arne Duncan, with their Race to the Top program, to Brown's longtime support of charter schools--that they are no friends of public education.

Some activists will argue, as CFT President Josh Pechthalt did back in March, that Proposition 30 was the product of grassroots mobilizations that forced the Democrats to place a progressive tax measure on the ballot. "We did not get everything we wanted," Pechthalt said after reaching an agreement with Brown over the Millionaire's Tax. "That is the nature of compromise. But we feel good that on balance, this is a solidly progressive measure, a great improvement on what the governor was proposing until now, and with a unified effort, has the best chance of passage in November."

This argument seems clear enough on the face of it. However, if Brown was going to put a similar measure on the ballot anyway, haven't we ended up simply playing his game by supporting Proposition 30--and paying for it out of union dues in the bargain?

The danger here is that rather than doing the long, hard work of building a movement powerful enough to fight the 1 percent and their backers in Sacramento, we simply end up negotiating from a position of weakness, trapped in a concessionary logic with no end in sight.

And what if Proposition 30 fails? Many unions have already built trigger cuts into their contracts, essentially tying their hands before the fight even begins. This is a very dangerous precedent. If Proposition 30 passes, we will have to deal with what has become the "normalized" ravaging of public education in California. If it fails, things will be 10 percent worse than they are now--which will mean even more suffering for our side.

But either way, Brown and the Democratic majority in Sacramento will enforce the cuts, and we will have to fight them. The attacks will continue until we learn the lessons of Chicago and Quebec: If you don't mobilize and you aren't willing to strike, you will lose. Brown is hoping we didn't get that message.

This leads to the question how supporters of public education and union rights should vote on Proposition 30 on November 6.

The only forces in California who are actively campaigning against Proposition 30 and arguing for a "no" vote are the Republican Party and anti-tax crusaders like the Howard Jarvis Foundation. Some student and union activists believe that because Proposition 30 destroyed the movement for the Millionaires Tax and includes a regressive sales tax, we should abstain on November 6. Others, while agreeing with the criticisms listed above, will argue that a critical "yes" position makes more sense.

Both of the latter stances recognize that Proposition 30 was forced on us by a hostile governor, and that whichever way the vote goes on November 6, we will have to chart a new course if we want to defend public education in California.

Further Reading

From the archives