Molly Munger says she and Jerry Brown could work together on tax measures

The high-pressure game of signature gathering outside stores has turned into a mad dash to election offices across California as tax proponents submit their petitions for the November ballot.

Gov. Jerry Brown is pinning his budget hopes on his multibillion-dollar tax hike on sales and high-income earners. But he faces a dogged challenge from wealthy civil rights attorney Molly Munger and the California State PTA, who said Monday that they submitted 848,000 signatures for a separate tax initiative, likely more than enough to qualify for November.

Munger's initiative would raise an estimated $10 billion annually for 12 years by hiking the state income tax on all but the poorest earners along a sliding scale. Money would flow to the state's K-12 schools and early childhood programs. For the first four fiscal years, the initiative would also provide $3 billion to help the state's general fund budget.

Munger, the daughter of billionaire Charles Munger, has been the sole financier of the campaign so far with $7.2 million in contributions to date.

On Monday, she chatted with The Bee:

>Is there any time to cut a deal at this point, or is it just full steam ahead on your initiative, and the governor is full steam ahead on his?

Well, there's no time to blend the two initiatives to create one on the ballot. But there is time, and it's something we're very interested in doing, to find a path where we can run a cooperative campaign that maximizes the chances we get a successful outcome this fall.

>What would a path like that consist of?

It would take a lot of good thinking by very smart people. The default setting for campaigns is head-to-head and hard-fought. But I know that we certainly would like to work on it, think with the governor and his team about it. And we're optimistic that there is a path to some sort of cooperative approach here that would be a good thing to do.

>The ads you have run have suggested the governor's proposal does not help schools the way yours does. They're not out-and-out attack ads, but there's an implication there that the governor's plan doesn't help schools. Is that your belief?

Well, I don't think there's any doubt the governor's initiative does much, much less for our public schools than "Our Children, Our Future" does. That is beyond debate.

>There's a political concern on his part with your initiative. You do raise revenues from a much broader spectrum of taxpayers, but that may also come with a political cost.

The governor is getting, I believe, between five and six times more revenue in his initiative from our very lowest- income people because he's using a sales tax. He's not limited his tax increase just to upper-income people. He's combined an upper-income tax increase with a sales tax increase that gets a lot of money out of very low-income people.

>What about the middle-class taxpayers paying a higher income tax, and your initiative being vulnerable at the ballot when those voters going into the voting booth?

Here's a middle-class taxpayer, a family of four, making $95,000. OK? $514.

>I mean, somebody making $95,000 might say $514 is a lot of money.

They might. What I would remind people is that for the vast majority of Californians, the amount that this tax increase would cost is significantly less than it used to cost them to register their cars. … You do get into some larger amounts when you get over $100,000. When you get into those ranges, you're talking very disproportionately about homeowners, and one of the things we want people to understand is a personal income tax is tax deductible against your (federal) return. … A family of four with $125,000 pays $926. But that family with $125,000 likely owns a house and is itemizing its deductions. (The family) is itemizing its deduction, so it only pays $600-something, not $926.

People say, 'Oh, they don't like to pay taxes, so this can't possibly work.' But what they forget is that that's only half of people's equation. They consider what they have to pay, but they also consider what good it would do. Right now, the education of California's children is top of mind of the vast majority of Californians, in poll after poll after poll.

>But doesn't 30 percent for the first (few) years go to the state?

It does, but they don't seem to mind that because they kind of go, 'Yeah, you know, for the first few years, a little budget relief, that's OK.' But they get the point that the vast majority of the money over the 12 years is for the kids in the schools.

>Have you met with the governor?

Not in person, but I have talked to him on the phone.

>When was the last time?

Last week.

>What did he ask you or tell you?

I think it was the start of a good conversation. Remember, I started (this) conversation by saying there was a path here to figure out some sort of cooperative approach, and I'm hopeful we're going to find it.

>Are you prepared to go all the way to November? Can you give us a sense? Are you going to be running television ads statewide throughout the fall?

You know, I want you to be satisfied that we're going to have a very robust and responsible campaign. But perhaps I would be in trouble with my team if I gave you a large amount of detail with it.

>How soon might you reach some kind of agreement with the governor?

I couldn't speculate … let's not get ahead of ourselves here. The governor has made no commitment to us that we can arrive at a cooperative relationship.

>I know you've talked about some cooperation, but if both of them are on the ballot, isn't the potential there that both of them would fail?

Well, the potential of either one failing, even if it's the only one on the ballot, is always there. I mean, there is no sure thing in an election. The people speak and the people decide. So there's no assurance that if we were off the ballot, the governor's would pass, either.

And I've heard people say that they think having two on the ballot may persuade people of the seriousness of the financial situation the state faces. It's hard to predict what the effect will be and it's hard to predict what would happen if there were only one.

• Read more articles by Kevin Yamamura

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