Endorsements: 'Yes' on Jerry Brown's Prop. 30; 'No' on Munger's Prop. 38

Published: Sunday, Oct. 7, 2012 - 12:00 am | Page 6E

Gov. Jerry Brown's initiative to raise taxes by $6 billion a year is vital to California's future on many different levels.

Although purists might have wished for an alternative with wiser tax policy, Proposition 30 is the measure that is before the electorate on the Nov. 6 ballot. It warrants a "yes" vote.

The budget approved earlier this year includes $6 billion in cuts that would be imposed if Proposition 30 fails. The biggest cuts, $5.4 billion, would fall on public schools, forcing local officials to shorten the school year by weeks, a disastrous prospect. Public universities would endure another $500 million cut, and raise tuition again.

Brown's critics scoff that he would never preside over such cuts. However, there is no evidence of a Plan B. Voters would be wise to take the governor at his word.

The governor's proposal faces competition from Proposition 38, by wealthy civil rights attorney Molly Munger. Munger's measure would raise income taxes by $10 billion primarily to fund schools.

The policy embodied by Proposition 38 is preferable to Proposition 30's policy. Munger's measure contains no sales tax increase and earners in the vast middle would end up paying additional income taxes, a necessary step to reducing volatility.

However, Munger's initiative does nothing to help public safety, a key component of Proposition 30. Although Proposition 38 would help schools, administration officials claim that if it passes and Proposition 30 fails, lawmakers would cut programs in the coming year.

Schools certainly need an infusion. In another year, Munger's initiative would warrant consideration, but not this year. The risk is too great. Voters should reject 38.

When Brown took office 20 months ago, California faced a $25 billion budget deficit, more than a fourth of the general fund, and debt of more than $30 billion.

The problems date to Gray Davis' and Arnold Schwarzenegger's tenures. They overspent, plunged the state deeper into debt and adopted so-called budget reforms that were flimsy, if not illusory.

Brown, who ran on a pledge that he would not raise taxes without a vote of the people, tried last year to persuade Republican lawmakers to agree to place before voters an extension of taxes raised by Schwarzenegger. A few Republicans contemplated compromising but buckled under pressure from anti-tax advocates.

With no chance of compromise, Brown turned to the ballot, offering what probably would have been reasonable tax increases and defensible tax policy, only to be attacked from the left. A union and a liberal advocacy group pushed a competing initiative to raise taxes exclusively on the highest earners. Polls showed it fared better than Brown's, and Brown capitulated, adopting much of the union plan.

Proposition 30 would raise income taxes on single filers earning $250,000 or more, and joint filers earning $500,000, generating $5 billion a year. The tax would last for seven years. For joint filers earning $1 million or more, the marginal tax rate would rise by a hefty three percentage points to 13.3 percent.

The new rates would affect about 1 percent of California's income tax filers. Their income is volatile, which leads to the cycle of occasional booms and, lately, perennial busts.

In addition to the income tax hike, Proposition 30 would raise state sales taxes for four years by one-quarter of 1 percent, generating $1 billion a year.

Brown acknowledges the policy is not ideal. But politics rarely produces perfection. Whether or not Proposition 30 passes, Brown and legislators should redouble efforts to overhaul the tax system. No undertaking would be more important.

In his first two years in office, Brown pushed through significant changes that cut state spending by ending redevelopment and lowering prison population. He also has worked to restrain the excesses of Democrats in the Legislature.

California's fiscal house remains shaky. There is massive debt and immense need. Proposition 30 offers a way for the state to start climbing out of its pit. It's not ideal. But it is the best available option. At the midpoint in his term, Brown deserves a vote of confidence.

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