California Tax Initiative Targets 1%

By Seth Sandronsky

A union of students and workers, United Auto Workers Local 2865, is backing the California Funding Restoration Act for the November 2012 state ballot.

The Act would raise $6 billion per year for public schools, K through higher education, and basic services by increasing the income tax of millionaires. They of course are the 1% living large at the expense of the 99%, in the words of the Occupy movement.

In California and across the US, state lawmakers are agreeing to spending cuts for public higher education and government services that help ordinary people generally.

In the Golden State, this policy tendency also known as austerity expands cost-shifting from the state to students of the CSU and UC systems, with 450,000 and 225,000 students, respectively. In the capital region where I reside, 27,000 students at Sac State and their 33,000 counterparts at UC Davis feel this policy most particularly.

UAW 2865, which represents 12,000 readers, tutors, and TAs at UC, is a part the ReFund California Coalition which backs the progressive act. Other backers are the California Federation of Teachers and Courage Campaign.

According to Joshua Pechthalt, CFT president, “It is time for the wealthiest Californians to pay their fair share to restore funding for education and essential services.” In a CFT statement, Pollster Ben Tulchin, a pollster, said: “Extensive recent public and private polling show that California voters strongly support a progressive approach of raising taxes on the rich to fund education and other essential services that have been cut in recent years.”

Against this backdrop California officials will on Dec. 15 review state tax revenue for July 1 to Dec. 15.

Based on how actual tax revenues for that period compare with what lawmakers projected for the 2011-2012 budget, spending cutbacks for public education K-12 might come to pass due to a provision called a “trigger” as a policy to address a budgetary shortfall.

“Trigger” or automatic spending cuts bode ill for the 99% of Californians, from K-12 students and scores of other residents who rely on state spending. Reducing state government spending is a proven failed policy to boost the private economy.

In the meantime, Democratic Gov. Jerry Brown is well aware of political impacts to him and his party given the prospects for a cash-strapped state budget pushing through more spending cuts as a weak recovery from the Great Recession lingers. He backs a ballot initiative “The Schools and Local Public Safety Protection Act of 2012” for this November that raises $7 billion by increasing income taxes on individuals earning over $250,000 annually and temporarily imposing a half-cent increase in the sales tax statewide.

What Gov. Brown calls the wealthy, with incomes of $250,000 a year, is technically not the 1%, which in 2009 required an annual income of $350,000. Further, a sales tax is regressive. It takes proportionally more from low- and mid-income taxpayers than those on the upper rungs of the ladder.  

In California, it is unclear if the economy can expand enough to generate sufficient state tax revenue to avoid more spending cuts to public education and services. Thus the outcome of California’s progressive tax proposal to make millionaires pay a larger share of their income for social spending could change our theory and practice of so-called direct democracy by ballot initiative. Watch this one.

Seth Sandronsky lives and writes in Sacramento. Email ssandronsky@yahoo.com.

From The Progressive Populist, January 1-15, 2012