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Editorial: Will 2012 be a pileup for reform initiatives?

Published: Sunday, Nov. 27, 2011 - 12:00 am | Page 6E

Some are deriding Nicolas Berggruen and other wealthy reform advocates for jumping into the initiative fray with plans for fixing California's tax system, schools and other services.

This editorial board has long been leery of initiatives, and we certainly understand why many are angry about wealth disparities that have grown wider since the recession. Yet Californians shouldn't reflexively reject a reform measure because its backers are wealthy. Instead, we should welcome the energy behind any and all efforts to fix California's governance and finances, and recognize that any change in the status quo will require not only strong grass-roots support, but substantial financial backing.

All that said, there is a real chance that the November 2012 ballot will be a demolition derby of well-intended, duplicative and incompatible tax initiatives. Out of pure confusion and distrust, voters could end up rejecting them all, squandering an opportunity for California leaders and citizens to get behind a plan that will help right our ship of state.

Here are some of the measures likely to be on the ballot:

• Berggruen and his Think Long committee have a 23-page proposal that, among other things, would flatten the personal income tax and extend sales taxes to services, raising about $10 billion a year. The proposal likely would reduce the wild swings in state revenue, but some critics say it would unduly shift tax burdens to the middle class.

• Hedge-fund manager Tom Steyer has filed a proposal to raise $1.1 billion a year from out-of-state companies to retrofit schools and other buildings to save energy. Under his proposal, businesses would be required to pay taxes based solely on the proportion of sales they have in California, as opposed to other states. Berggruen's proposal also seeks this change.

• Molly Munger, daughter of Charles Munger, who is Warren Buffett's partner, has plans for an initiative to raise income taxes, largely on wealthier Californians. As Dan Morain reports in his column today, it would raise an extra $10 billion yearly for schools, with the money going directly to school districts.

• California Forward is working on an initiative for a constitutional amendment that, among other things, would shift the state to a two-year budget and curb last-minute legislative amendments.

• Gov. Jerry Brown and labor unions are said to be working on a tax plan yet to be unveiled.

Californians seem willing to support tax measures, but only when confident that the extra funds will be used for top priorities, such as schools or local services. In the recent Nov. 8 election, voters statewide approved 40 of 53 local measures to increase, extend or create new taxes, fees and bond measures, according the League of California Cities.

That could bode well for Brown if he were to push a single, well-crafted plan for new tax revenues that would not only help the state with its expected 2012-13 deficit, but stabilize the state's finances for years ahead. But if competing measures are on the ballot, the governor's plan could get shoved aside. And don't forget that many local governments will have tax measures on the 2012 ballot, further testing the generosity of taxpayers.

Voters in 2012 will have to weigh these choices, but they may also have to send a message about what kind of state government they want.

Do they want sweeping, dramatic change? Or are they satisfied with incremental reforms, such as the ones already approved for redistricting reform and "top-two" voting in primaries?

Do they want reforms that lock funding for key state services, limiting the ability of lawmakers to make such decisions? Or would they rather empower elected representatives, while taking away some of the abuses – such as last-minute "gut-and-amend bills" – that make it hard for the public to watchdog legislative spending?

By any measure, the 2012 ballot could be a historic one for California and future generations.

© Copyright The Sacramento Bee. All rights reserved.


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