More Information

  • California state worker pay cut details still unsettled
  • Voters will decide on two competing tax measures likely to be on the Nov. 6 ballot.

    A plan pushed by Gov. Jerry Brown:
    • Raises income taxes for seven years on Californians earning more than $250,000.
    • Enacts a one-quarter of 1 percent increase in the state sales tax for four years.
    • Includes a round of "trigger" cuts after the election if the ballot measure fails.

    A measure backed by Molly Munger and the PTA:
    • Raises the state income tax for 12 years 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 also provides $3 billion to help the state's general fund budget.

Campaign to defeat Jerry Brown's tax measure gears up

Published: Monday, Jun. 18, 2012 - 12:00 am | Page 1A
Last Modified: Tuesday, Feb. 26, 2013 - 8:16 pm

One morning last week, as Gov. Jerry Brown and the Legislature huddled over the state budget at the Capitol, the effort to undo a central part of Brown's spending plan began to take shape in an office building just a few blocks away.

There, at a news conference to announce the formation of "Californians for Reforms and Jobs, not Taxes," Jon Coupal, president of the Howard Jarvis Taxpayers Association, previewed the campaign against the governor's November ballot initiative to raise taxes. It will rely on messages, he said, that "quite frankly, are short and sweet."

Brown's opponents, Coupal said, will remind Californians of the state's relatively high tax burden, challenge the Democratic governor's claim that his tax increase is for schools and publicize unflattering examples of government spending.

It's a formula that has proven reliable in California tax votes in the past decade. Not since 2004 have voters approved a statewide ballot measure to raise taxes.

"My sense," said Tammy Frisby, a research fellow at Stanford University's Hoover Institution, "is that they're just going to go back to the playbook. It's worked for them in the past."

The political implications of the November election are huge for Brown, a Democrat who by Election Day will have spent nearly two years trying to raise taxes.

He proposes to raise the statewide sales tax by a quarter-cent and impose income tax increases on Californians earning more than $250,000 a year.

Though Brown has courted business interests sufficiently to raise money from some and to keep others on the sidelines – the California Chamber of Commerce, among other groups, has not yet taken a position on the tax measure – the Jarvis group presents what is likely to be a highly organized and sustained effort to defeat him.

Less than 24 hours after the news conference and not quite five months before the election, Coupal flew to Los Angeles to meet with potential donors and to conduct focus groups.

"We look forward to this campaign," he said. "We look forward to giving this tax increase the inglorious defeat that it so richly deserves."

Brown and his allies are widely expected to outspend their opposition, but Coupal said his group, which includes Jarvis, the National Federation of Independent Business, California, and the Small Business Action Committee, will raise enough money to compete on radio and television.

"We're going to have a sophisticated campaign," Coupal said. "We're going to have a well-run campaign, and I think we'll be pushing out our messages very effectively to California voters."

The anti-tax activists are compiling examples of government expenses they say are wasteful. Coupal brought up a favorite: high-speed rail, the $68 billion project that polls poorly but is championed by Brown.

"Now that's what we could use," said Joel Fox, president of the Small Business Action Committee. "Raise the high-speed rail issue over and over again."

"Yeah," Coupal said. "That's a silver platter."

Public support for Brown's measure has slipped in recent months but remains above 50 percent.

Confidence in Brown's handling of the state deficit, however, is waning, and the public's attitude about the economy remains sour. Confronted by the prospect of a broad-based sales tax increase, said Ted Costa, a veteran of conservative ballot initiatives, "Everyone's going to be pissed off."

"Look at the attitudes that people have," said Costa, who is not involved in the Jarvis campaign. "When you look at the attitudes, then you have an idea of how it's really going."

Brown's measure remains more popular than a competing tax initiative backed by civil rights lawyer Molly Munger and the California State PTA. Coupal suggested he would pay little attention to that one.

"I do think it's something that we'll be watching, but right now, with the political strength behind it, I think the governor's tax proposal is the leading horse in the race," Coupal said, "and we're going to be focusing in on that."

Brown says that if his tax measure fails, it will be necessary to make billions of dollars in further cuts to education and other services to balance the state budget. The third-term governor has cast the initiative as significant to resolving years of California budget deficits.

"It's balanced, it's fair and it will take a major step forward in putting California in a very solid position," he said when he delivered initiative signatures to the Sacramento County Registrar of Voters last month.

He said, "As governor, my responsibility is to balance the budget, protect our schools, protect public safety."

Coupal and his allies argue on their campaign website that "there are thousands of other state programs, bureaucracies, commissions and boards, but the thing they threaten us with is cutting schools." The campaign questions how much money is spent directly in classrooms and how much on overhead.

Dan Newman of SCN Strategies, the consultancy conducting Brown's campaign, said highly publicized efforts by the governor to reduce spending have resonated with voters.

"They've seen the governor make hard cuts, and they've seen how serious he is about cutting what can be cut," Newman said.

He said Californians are convinced the state's budget problems are more severe than can be cured by eliminating waste, fraud and abuse.

"It hasn't felt like this (before), and you haven't had voter sentiment like this … voters really feeling and understanding we're way beyond the point where we can eliminate waste, fraud and abuse," Newman said. "I think we're at a unique level of understanding of the severity of the situation."

In 2009, voters defeated Proposition 1A, which would have extended certain tax increases. Gov. Arnold Schwarzenegger, who promoted the initiative, said in a prepared statement at the time, "The voters have spoken and they are telling us that government should do the best it can with the money it has."

The 2009 initiative, like Brown's, was opposed by the Howard Jarvis Taxpayers Association. But it was also opposed by many labor unions because it would have imposed long-term spending restrictions on the state. Among them was the California Federation of Teachers, which is now coordinating with Brown on his tax effort.

Coupal predicts a repeat of the outcome in 2009. But he also sees similarities to a campaign waged five years before Proposition 1A, when voters in 2004 approved Proposition 63, the tax on millionaires for mental health services.

The Jarvis group became involved in the campaign too late, Coupal said. It is one reason he is testing messages on focus groups and raising money this year in June.

"We tried to jury-rig a campaign six weeks out, and you can't do that," Coupal said. "I think one of the lessons we learned from Prop. 63, quite frankly, is you've got to start early."

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