The Fight of Our Lives

See several important updates below.

At yesterday’s education budget meeting in Los Angeles, educators from across the state took to the microphone to tell Governor-elect Jerry Brown that schools cannot accept more funding cuts without the system collapsing. And Brown, along with Treasurer Bill Lockyer and other state officials, explained that while they understood full well that California’s schools have already been cut to the bone and are funded worse than in almost every other state, there’s not going to be any avoiding those cuts – unless new revenues are approved.

I’ve written before about the California Impasse – the desire of voters for better public services, their openness to new taxes to fund those services, and their hesitation to actually pull the trigger, at least statewide. As was pointed out several times at the event, majorities of voters have shown willingness to tax themselves for schools, but the 2/3rds rule for parcel taxes has blocked these from being successful.

Jerry Brown pointed out that voters statewide aren’t yet willing to accept new taxes for programs, and we saw that during the November 2010 election. Yet he also noted that California is an extremely wealthy state, the 8th largest economy in the world, with a GDP of over $1 trillion. Closing a $28 billion gap with new revenues, just 2.8% of that GDP, should not be a problem.*

So how to resolve the impasse? You have to give Californians a very clear choice: have low taxes and ruined schools, or get our act together and raise the necessary revenues we need to responsibly run our state. In his role as Jacob Marley, he is going to show Californians the error of our past ways, why acting like Scrooge toward our schools, our health care, our parks and our transportation systems is going to produce a nightmarish future. And then he will leave it up to us to make the right choice.

The plan appears to be this: push through an all-cuts budget in early 2011, perhaps shutting down programs like CalWORKS and making massive cuts to K-12 education, and then go to voters with new taxes at a spring special election, and letting California decide what’s more important to them: good schools or low taxes.

The strategy is very risky, as Dan Walters rightly points out:

Even before he could seek new taxes from voters, however, Brown would also have to persuade his fellow Democrats in the Legislature to vote for a slash-and-burn budget. And that could be extraordinarily difficult because Democrats would be getting pressure from their political constituencies, such as public employee unions, and be facing uncertain re-elections in 2012 because of redrawn districts and a new “top-two” primary system.

Were Brown’s doomsday strategy to fall short, he’d be stuck with an even worse budget mess and virtually no option other than following through with deep spending slashes in schools and other public services.

Democratic legislators will want some kind of safeguard in any slash-and-burn budget. And getting the legislature to approve putting a tax proposal on the ballot – which I believe requires a 2/3rds vote** – would be very difficult given Republican obstruction. But this strategy seems to be the only way to break the impasse.

This battle will be, by a wide margin, the most important political battle fought in my lifetime (realize, of course, that I was born a year after Prop 13’s passage) in California. It is a fight progressives cannot afford to lose. We’ve been talking about how to change the public conversation about government and taxes for quite a while – now we have no choice but to execute that strategy, and we have six months at best to do it.

No pressure or anything.

UPDATE: Steve Harmon’s article on this, which quotes me, also includes a telling Jerry Brown quote about this plan, and about the need for progressives to step up and take the lead in educating voters:

“Temporary taxes need to be extended,” said Joel Shapiro, superintendent for South Pasadena schools. “Absolutely, we can’t do without revenues. We need to educate the voters of California “… that the only way to keep the education system from deteriorating worse is to increase revenues, taxes or fees.”

But Brown appeared slightly miffed at the tone Shapiro took toward voters.

“You say we’ve got to educate them — in some ways, they’ve got to educate us,” Brown said. “It’s not really a we/them. It’s society. There’s a lot of hostility to government. They look at the city of Bell, they pick up the paper and see firefighters getting a $250,000 pension. There’s a lot of skepticism about government in the political process. That’s a reality and we have to take the world as we find it and we have to work through it.”

There’s no doubt about the truth of Brown’s words. That skepticism of government is exactly what the right will play upon in their effort to defeat these new revenues. We must be ready.

UPDATE 2: Dan Walters writes with some very important clarifications about two points I marked with asterisks above.

* On California’s GDP:

First, the deficit is actually more like 1 percent of the state’s economy as I pointed out in a recent column and Jerry cribbed on Tuesday. The economy is $1.9 trillion (2009, Department of Commerce) and the structural deficit is $20B.

That just makes the point even clearer – a tax increase of about $20 billion would secure our public services for years to come with a very tiny impact on our economic activity. Surely 1% of our GDP can be harnessed to fund the services that we must have for broadly shared prosperity in this state.

** On how Democrats can pass a budget and propose new revenues without a single Republican vote:

Secondly, it would not necessarily take two-thirds vote to place taxes before voters. It could be done in special session that Arnie has already called on simple majority votes and would be framed as an amendment to an existing statutory tax initiative, such as Steinberg’s income tax surtax for mental health. In fact framing it as amendment to existing tax initiative may be only way to place taxes before voters because that’s the pathway allowed in the state constitution. It was used for 2009 tax-related measures.

Anyway, Jerry and Dems could pass new budget with simple majority vote (Prop 25) and ballot measure by same vote in special session, then adjourn session and wait 90 days for election. Any non-urgency bill passed in special session takes effect 90 days after session ends. That’s the way it could, and probably will, be done to have election in May (perhaps coincident with LA city election) or June.

Awesome. Democrats can do all of this without Republicans, which is fitting given their irrelevance to California politics these days. Let them carp from the sidelines as Democrats and progressives get to work building public support for a real and sensible solution to our state’s budget woes.

62 thoughts on “The Fight of Our Lives”

  1. But, What other choice do Californians have? Even Arnold never tried this, But then He liked wishful thinking and Gimmicks and those don’t pay the bills. And I think It’s about time that Californians got a bucket full of Ice Water in the face, As they need to wake up. As You can’t expect to get something for nothing. Funding of Schools should be returned to the local level(County or if It’s big enough, a City level).

  2. Since we’re in the fight of our lives maybe it’s time to think outside the box a little bit.

    If we could ignite some spark of intelligence among the political class the cannabis industry would love to start picking up some of the slack.

    If cannabis prohibition, which is based to a large degree on propaganda and prejudices is toxic to ideals of democracy, why don’t we kill two birds with one stone and legalize it through the state legislature rather than the ballot box?

    I’m really getting tired of our state’s politicians pretending there isn’t a new source of funding out there.  

  3. I am not sanguine that this will turn out well.  When these propositions are put forward, there will be arguments that they’re the “wrong” taxes, etc.  We saw this with the dedicated auto registration fee for the state parks this past election — it didn’t even get 50% of the vote, much less the two thirds required.

    What revenue increase will be proposed?  Income tax increase?  Corporate tax?  These will all be attacked as “job killers.”  Fees specific to families with children in school? That exacerbates class based public schooling.

    Even if we find something that has support, if it only has 66.5% support — it fails!

    If Jerry “Jacob Marley” Brown doesn’t include a ballot proposition that eliminates these 2/3rds requirements (and that ballot proposition may not need 2/3rds to pass?) then he’s not really addressing the real problem.

  4. All I know is that the legislature must get 2/3 to increase taxes & fees, local school parcel taxes must get 2/3, and local schools bonds must get 55%.

    California is conspicuously missing from this table of state that require a supermajority to pass ballot propositions.

  5. I would vote no for new taxes. And I will explain why.

    I am already in the top tax bracket of 9.3%. But that is not the real reason I am against raising taxes.

    It is my property taxes that is the problem. By virtue of having bought a house in the last decade, my property taxes are in the same range as  my income taxes.

    There is no way I’m going to support raising taxes, unless Prop 13 is abolished. All around me I see rich, old people who pay a pittance in property taxes, but sit on enormous wealth.

    I would bet that most of the young families, who bought houses in the last decade will do exactly the same thing.

    This idea that the hole created by the unjust and regressive property taxes can somehow be filled by more regressive increases in income taxes or sales taxes will meet with stiff opposition from my class – even if we believe in progressive taxes and government for good.

    Abolish prop 13, or tax the hell out of real estate gains. That will be just and will get my support.

  6. No, not figuring out what frames to use (i.e. the 2005 question of “What do we stand for?”), but figuring out who the best stakeholder is to put on the hook for making sure good frames about government take root.

    By putting the governor of California and the state’s ginormous education establishment on the hook as stakeholders for a big proactive push to reframe the value of government, I think this could be a watershed moment.  Clearly still full of risk, tho.

  7. Robert is right to say it’s the fight of our lives.  Lots of uncertainties, including what goes on the ballot and what happens if we lose.  For what it’s worth I think there’s a good chance we do lose this summer (though even if we do lose I think we should come out of it with more muscle than when we go in).  So we need to plan seriously for a scenario that leaves CA bleeding on the floor until at least November 2012.

    That said it would help me for one to get clear about the knowable unknowns that define what we face in the near future.  Clearly there’s a lot of confusion out there about the rules.  My understanding has been that putting a measure on the ballot would require either 2/3 legislative approval or an initiative signed by 8% of the voters in the last election (let’s just say a million signatures), after which we’d need 50%+1 voter approval.  Is this correct?  Also, is the initiative logistically possible?  If so it would produce the most powerful field operation ever, which is of course what we need.

    It’s been suggested here that the Dems could also do it with a 50%+1 legislative vote as an amendment to an existing statutory tax initiative.  Requiring no field operation.  Might this be the first step toward defeat?  (opening the campaign to the charge of “weaseling around the intent of the voters…”, and setting us on track to do a campaign with far weaker legs on the ground than needed?)


  8. If the escalation clause for residential owners of prop 13 went from 2% to 3.5%, and the tax remains capped at 1% of market value, we would gradually solve the inequities created by prop 13 with the type of predictability that people can calculate.

    And do a similar program with a higher rate (say 4.9%) for commercial properties.

    Send all that revenue to local schools and local government with voter approval (after you first take it away with a realistic budget)

    And redirect property tax from redevelopment agencies back to its original purposes.

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