Explaining the Difference Between Props 30 and 38, Dueling Tax Initiatives

Teachers at Angeles Mesa Elementary School in Los Angeles review voter information on Proposition 38 during a recent teacher union meeting. (Ana Tintocalis: KQED)

Teachers at Angeles Mesa Elementary School in Los Angeles review voter information on Proposition 38 during a recent teacher union meeting. (Ana Tintocalis: KQED)

Education advocates in California say public schools will either sink or swim based on the outcome of two competing tax initiatives on the November ballot — Proposition 30 and Proposition 38. While both aim to protect students from more devastating budget cuts, they go about it in very different ways.

To better understand what is at stake for California’s public schools, I started off by visiting the headquarters of the Los Angeles Unified School District, the largest district in the state.

LAUSD has had to cut about half a billion dollars from its budget every year for the past five years because of the state’s money problems. Class sizes have swollen to more than 40 students; the school year was cut by five instructional days, and teachers have lost their jobs.

The person behind every difficult financial decision is Megan Reilly, the district’s Chief Financial Officer.

“The biggest challenge for Governor Brown is convincing [voters] that state government can be trusted to spend their tax dollars wisely and effectively.”

Her office is perched on the 26th floor of a skyscraper in downtown Los Angeles. Stacks of papers and financial reports are piled on and around her desk. Although she has a sweeping view of the city, she can’t take her eyes off of a series of large monthly calendars on the wall.

November 6th, Election Day, is circled, underlined and highlighted.

“I don’t think you can not think about it,” Reilly says. “We’re just in limbo because everything is critical about what is going to happen at the November election.”

Reilly views the election as a watershed moment for schools, because if voters do not approve Prop. 30 or Prop. 38, L.A. Unified — along with most other districts in California — will be pushed further down the road toward insolvency.

“I can’t face counselor ratios going even higher,” Reilly says. “I can’t face class sizes going even higher. It’s really hard for anyone to face the public saying, ‘I’m going to have to take more away from the schools.’ There’s nothing more to take.”

Reilly and other school administrators across the state believe Gov. Jerry Brown’s initiative, Prop. 30, offers the most immediate relief.

It would raise roughly $3 billion for public schools and community colleges by taxing the wealthiest Californians for seven years and it would increase the sales tax by a quarter-cent, a hike that everyone would have to pay. Overall, the measure would raise $6 billion for education and to balance the state budget.

However, should voters reject Prop. 30, schools will get hit with a $6 billion spending cut halfway through this school year. Many districts would be forced to lop off three full weeks of instruction.

“These are horrific cuts,” says Dan Schnur, director of the Jess Unruh Institute of Politics at the University of Southern California.

Schnur says that given the constant cuts to public education, taxpayers may finally be ready for the first time in almost 20 years.to reach into their pockets to help schools.

“The biggest challenge for Governor Brown is convincing them that state government can be trusted to spend their tax dollars wisely and effectively.” The governor faces a trust issue because for the past five years, lawmakers have tapped into the state’s special pot of education funding to balance the budget.

The $3 billion raised annually by Prop. 30 would go back into that education pot, refilling it to the same level as before all of the cuts. This move would stabilize school funding and  eventually  even expand it. It would also free up existing general fund dollars for other needs because that is part of the governor’s larger plan to fix the state’s structural budget deficit.

One person who doesn’t trust the governor’s strategy is Molly Munger, the wealthy civil rights attorney who is bankrolling Proposition 38 — the competing education tax initiative. Munger’s name has been splashed across the news because she’s been criticizing the governor and Sacramento lawmakers for squandering education dollars.

“[Voters] are willing to pay the tax. But they insist, rightly, that the money not go to Sacramento, because they know if it goes there, bad things will happen to it,” Munger said in a recent interview with San Francisco’s KNBC Channel 3.

Unlike the governor’s initiative, Prop. 38 would tax the income of almost every Californian for 12 years. Under the initiative, public schools could receive as much as $10 billion the first year, which would be set apart from the state’s general fund. Some of the money would also go to preschools and to paying down bond debt.

Scott Kaplan has three children in the Redondo Beach Unified School District, just north of Long Beach. He’s backing Prop. 38 because he believes it would give communities more control of how the extra money is spent.

“It’s a huge amount of money for our district of 11 schools,” Kaplan said. “What we can do with those funds at the local level … is phenomenal.”

But the state’s Legislative Analyst’s Office points out there is more to Prop. 38 than meets the eye. Because the money is earmarked for education, the initiative would do nothing to help California’s overall budget deficit. The measure also comes with a myriad of funding rules that school administrators say would be difficult to navigate.

And then there is the issue of timing. The Legislative Analyst states Prop. 38 tax dollars may not flow into schools until sometime during the next school year.

Erica Jones teaches 3rd grade at Angeles Mesa Elementary School near Inglewood. She backs the governor’s plan, Prop. 30, because she doesn’t want schools to get hit with that $6 billion spending cut should the initiative fail.

“I can’t wait for a great solution. We need help now,” Jones says.

Like many Californians, Jones feels the state’s wealthiest should kick in more to help the state and to get the school system back on track. “I’m all about shared responsibility,” she say,  “but there’s been a lot of responsibility put on the lower class and the middle class. So at this point we’re already struggling.”

Because the outcomes of these initiatives are so critical for education, a growing number of parents and educators are urging a yes vote on both.

However, only one can win — because Prop. 30 and 38 would increase the income tax on Californians. The state’s constitution views that as a conflict, so only the measure with the most votes can prevail.

And state taxpayer groups, of course, don’t want either one to succeed. They believe that giving more money to government simply encourages out-of-control spending. Here’s a chart of how much more Californians would pay under Prop 30 and Prop 38, respectively. The data is from the LAO; the dollar amounts represent the marginal tax rate for single-file taxpayers…

Listen to Ana Tintocalis’ story:

Update Oct 30: Here’s a great infographic comparing the two propositions, from EdSource. Click on the image to see the full graphic.

  • rockinlinus

    CA K-12 schools have been hit with $20 billion in cuts over the last four years. CA is 47th in the nation in per pupil spending. Prop 38 provides for both general fun relief and additional money to schools. The governor’s initiative keeps per pupil spending flat. Prop 38 increases student funding so we do not remain 47th in the nation in what we spend on our students. Molly Munger is on the right track.
    Prop 30 money gets swept into the general fund. Schools get 40% of general fund money. If the general fund increases, then money to schools increases. BUT that doesn’t mean that schools will get what they should be get. Categories of money from the general fund can be permanently removed and designated as something other than general fund money, thus lowering the total, thus lowering what schools get. The governor can do this on a whim and has done it in the past. Also, the governor can borrow money from schools as long as he says he’ll pay it back. This has already happened to the tune of $10 billion dollars. You can’t fault anyone for being skeptical about where the money goes.

    Prop 38 money is walled off. It does not go into the general fund. It goes into a separate education trust fund. It is money that is over and above whatever that 40% of the general fund turns out to be for any given year. This is the BIG difference between Prop 30 and Prop 38. Let’s be clear. Prop 38 is the ONLY initiative that can GUARANTEE additional funding for our schools. CA is 47th in the nation in per pupil spending. This is disgraceful. Prop 38 will help change that horrific status.

    • http://profiles.google.com/kilopapa3 Kenneth Price

      To rockinlinus, one important fact is that prop 30 is a progressive tax and 38 is not.

      • rockinlinus

        “Munger’s proposal would raise income taxes across the board, using a progressive formula, and fund only K-12.”http://articles.latimes.com/2012/oct/10/local/la-me-1010-lopez-schoolprops-20121010

        see also ourchildrenourfuture2012.com

      • Ze

        they both are, although 30 is moreso. however, prop 30 also has a sales tax which is REGRESSIVE

  • abc

    Why everybody highlights only “47th in the nation per pupil spending” kinds of stat. Why nobody brings up the fact that CA in the top 5 in the taxation. So if CA is in top 5 of all states in the taxation rate and bottom 5 in the spending for schools the problem should be elsewhere. The money must be going into black holes like generous pension etc. Why don’t we fix that first before asking tax increases. All this BS about schools etc is just hidden agenda to protect public union pensions and their salaries. Nothing more. KQED is playing their part in this propaganda.

    • http://profiles.google.com/kilopapa3 Kenneth Price

      For abc, it would be nice if you could back up your statements with facts rather than opinion, as that does not help solve our budget problems. Also whose problem is it that we 47th in the nation in per pupil spending? I am not sure anybody has a good handle on that issue. I know that I do not have the answer.

      • abc

        Dont you have access to internet to research. It will just take 2 minutes to get facts.

        The budget problem is spending problem. There is no dearth of revenues. Only people who want more taxes are public unions and clueless people like you.

    • raspeth

      Teachers do NOT go into teaching for the money. Teachers have already given their fair share, and then some. The “pensions” are reasonable for teachers. Even given that, half of new teachers leave education in the first five years of teaching, because it is far more work than one might think, and it is difficult to pay a mortgage as a teacher.

  • Gullible_Californian

    What I understand from the article is the Prop 30 frees up money from general fund so that public union pensions and salaries can be funded. So it is actually back door bailout for public unions and has nothing to do with schools. Wink Wink. I get it.

    • foofoo

      Paying for teacher salaries and pensions “has nothing to do with schools”? Without teachers there would be no education. Classes are way too large and we need to hire more teachers. What would you rather see the money be spent on?

      • abc

        Dude as of now 39% of budget goes to k-12 schools. If that is not enough then there is some serious problem on how that money is being spent. Do some research and use god given brain to think.

    • Not Fooled Again

      I don’t think you get anything. The cry against Unions across the land is coming from the greedy, and shouted by their idiot followers. The living standard that makes the U.S. a decent place to live, is being attacked by the super rich, and will result in workers spending their days in conditions that resemble China and the far east. Human rights violators are driving the,” We can’t compete” slogan, in every speech they give, or editorial they spew. Union were formed by these conditions, and they will rise to mass support again, if these conditions return.

  • http://www.facebook.com/PaulRichman.CaliforniaStatePTA Paul Richman

    We all agree the state needs new revenues. In addition to pumping more money into local schools, Prop 38 provides $3 billion per year in each of the first 4 1/2 years to pay down state debt.

    Paying down this debt allows current General
    Fund payments for this purpose to be redirected to higher education and other
    high-priority programs. During just the first 18 months Prop 38 is in effect,
    the set-aside for debt payments would free up more than $4.7 billion to help out
    the rest of the state budget – that’s enough to
    cover the total “trigger cuts” to higher education approved by the Legislature in its June budget,
    ($250 million to UC, $250 million to CSU and $500 million to community
    colleges).

  • perspective2

    Prop 30, 38 treat symptoms not the root cause. Sacramento Politicians and their lobbyists do not need more funds fo education.

    The wounds that Prop 30, 38 are to heal have been self inflicted largely
    by our elected Sacramento politicians who simply do not say no to any influential interest group be they, University of California (29%
    increase in salaries last 6 years), public employees, business, teachers, or
    other unions or lobbyists.

    And now Prop 30, 38 are used by Sacramento
    politicians and lobbyists to blackmail us

    • raspeth

      Prop 30 is an investment in our youth. What better investment is there?

  • perspective2

    Paul Richman…some examples of how University of California has used education funds and Prop 30, 38.

    UC Berkeley Chancellor Birgeneau ($450,000), Provost
    Breslauer ($306,000) pick pockets of in-state students, their parents clean.
    Birgeneau’s, Provost’s tuition increases ranked public Cal. the # 1 most
    expensive (during the greatest recession of modern times) for in-state students.
    B & B’s 14% annual tuition increases (2006 – 20012) illustrates an out of
    touch, self-serving Cal. senior management.

    Robert J Birgeneau and Provost forget they
    are public servants, stewards of the public money, not overseers of their own
    fiefdom. Let’s review how they used tax funding:

    Pay ex-politician $300,000 for several lectures;
    Recruit affluent foreign & affluent out of state students who displace qualified
    instate applicants; Spend millions (prominent
    East Coast university accomplishing same at 0 cost) for OE consultants
    to remove Chancellor, Provost created inefficiencies but prevent OE from
    examining Cal. senior management.

    Email opinion marsha.kelman@ucop.edu Calif. State Senators, Assembly Members (The
    author has 35 years’ management consulting, has taught at Cal. where he
    observed the culture & ways of senior management & yes was not fired)

  • Rick Eagle

    I am voting no on both Prop 30 and 38. After 30 years of voting “yes” for every school bond measure and “Save Our Schools” proposition on the ballot, I’ve had it. And I have voted for all these public education saving measures even though my wife and I sent our kids to private schools from k-12 grade. So we were paying twice. We voted for public education increases because we believe a strong public school system benefits all. However, after 30 years we have finally learned that more money will NOT save our schools. It is said that insanity can be defined as doing the same thing and expecting a different result. Here we are again, being asked to do the same thing and expect a different result. I give you insanity.

    I humbly admit I do not know what the answer is, but I am convinced that more money will not save or fix our schools. I can’t say how the additional money will be wasted but you can bet that no matter what is promised or how well meaning proponents of either (or any) measure may be, more money will not fix the problem. That lesson has been very well taught.

    • Monty

      The reason California and your local communities have to keep asking you for money and yet the schools are still struggling is mostly due to Proposition 13. That proposition dramatically reduced property taxes for individuals and corporations and made it much harder to raise property taxes. That big NO to property taxes was much bigger than any of your “Yes”s afterwards. The real solution is to repeal Prop 13. It is unfortunate that you think your money is wasted. Actually California has done amazingly well with the scant education funds that it has. Although they spend less than almost any other state, their results are only in the middle. If they could boost funding just to be average among the states, California schools and universities might again be some of the best in the country.

  • jp

    I am voting yes on Prop 30 and prop 38,
    but I hope Prop 30 passes. 30 will stabilize our education system without
    compromising the rest of the state budget. As a high school teacher, I have
    witnessed first hand the evisceration of our k-12 schools in the last 5 years. It’s bad. Went to Germany this summer to visit family and visited some schools. I was shocked. Our
    facilities look like dumps in comparison. If you equated it to cars, they have
    BMWs and Audis; we have broken down old Chevy’s from the 1960s and no
    vocational ed. I hate government waste as
    much as the next guy and know neither Prop is a panacea for all of our
    problems, but it’s better than the alternative. Our public schools are
    starting to resemble those you would find in a developing country. After all, not
    every kid can go to private schools.

  • Paul Lightner

    We have a right now problem but an easy fix that takes too long. We need the money now to help our schools and prevent more cuts. The lack of money is a symptom of poor management on our government’s part. It’s also poor management on our part. Just like many of you have been paying to save schools for decades, you have also allowed the same people to remain in office without forcing meaningful consequences for failure. All the money that has been thrown around to draft all of these education reform bills and the subsequent advertisements could have just as easily been spent on going to your child’s teachers and asking what supplies they needed. These people with the MILLIONS of dollars to just spend because they want to could have gone directly to the teachers and said, “Here! Have some books!!”

    There was a time where kids had to worry about mom or dad showing up to class juuust for the heck of it to volunteer to help the teachers. And no, I don’t have kids but I DO have a job that requires a lot of my time. That does not change the fact that I had a fairly decent education from our public school system and it was mostly because of some really good teachers. I was made to pay attention to school and in class before I got to pretend I had time to have friends. I STILL had a worse education than my father did just 30 years prior. Is that JUST from a lack of money in schools? No. It came from a change in focus and overall decline in the curriculum and failure by society to maintain the standards our educations, but also the incentives to uphold those standards.

    The “real” money isn’t in being a teacher, it’s in being an actor, a sports star or an administrator. We can’t do much about the skewed worship of the latest apple of the public’s eye, but we can do something about administration. It takes a lot of education and money, or at least it should, to make it into administration. BUT!!! Just because you are an administrator doesn’t mean you know what the hell you are doing when it comes to being a leader or understanding what you are expecting your teachers to do with what they have. And let’s face it, management isn’t here to help the worker, it’s here to help the business.

    Help the business by capping the amount of money an administrator can make to 10% or less of the gross median income of the district being controlled. Require all school level administrators to teach a minimum of five hours a week in their own school and ONLY within a subject that they have a degree or specialty in. If their education doesn’t not fall with in the needs of the school they control or does not offer a useable skill, such as being a school counselor, dietitian, nurse or other auxiliary position BESIDES administrator, then that person is not eligible for the position. Unless of course they are qualified to be THAT administrator and are willing to donate their time. Not because I assume that their job isn’t hard enough, but it ties them more directly to the job they are doing. If the teachers lose pay, the administration loses pay. If the teachers can’t perform their duties to proper levels, then neither will the administration. If I understand unions correctly, once you become management/administration you are no longer protected by the union. So if you fail at your job, you get fired too bad if it’s not your fault. More incentive to make things work, right?

    As for district level administrators, once again, an income cap should apply. This time with in 15% or less of the gross median income of your TEACHERS, not fellow administrators, with a requirement of 10 years or more experience as a teacher, 3 years as a school level administrator and no longer than 5 years out of the classroom environment. Just like with teachers, maintaining tenure and position should be accompanied with, not accomplished by, solid, applicable performance reviews. Let’s face it, not all teachers make good teachers just like not all students make good students. Meaning good grades aren’t what determines a students grasp of their education. I’ve learned things that it wasn’t until years down the line that I realized how I applied what I learned into practical use. Standardized testing won’t work to gauge performance until we offer a standardized level of existence. Testing should be based on how well a teacher imparts practical knowledge of a subject to their students. In the same way, administrators should be able to offer practical solutions to their teachers and schools to solve the problems they all face. Not just, “What teacher do I fire?” or “What program do I cut?”, but “How do I get my schools functioning?”

    We all must participate in that solution by forcing the time to learn what is going on when we aren’t looking. Finding the people in the community that have the drive and skills to help our schools with the problems they aren’t finding solutions to. Getting involved with our children’s teachers the way our parents got involved with ours. In some cases, they way our parents SHOULD have gotten involved. These educational short comings are affecting us as a community. Since our leaders obviously aren’t finding the answers like we elected them to, shouldn’t we find someone who will? Shouldn’t we do like the saying says? If you want something done right, do it yourself. My father CHOSE my classes for me until the day I left his home. He MADE my teachers accept his choices for my classes or to give him reasons for a different way. Granted, I almost didn’t graduate… But it was because I had too many college prep courses and not enough ELECTIVE credits. I may have freaked out about not graduating, but at least I knew it wasn’t because I was slacking off and not pushing my education as far as I could handle. If your child is going to fail, do you want it to be because YOU and the budget let them fail? Or would you rather it be because they did too much learning with what they had to work with? A bad education is achieved through poor instruction. And it’s supported, or fixed, by what you do at home. We now find ourselves right back at the symptoms of our education problem. Money will not cure our problem just like hope doesn’t cure cancer. But just like you need hope to fight cancer, we still need money to help cure our education system. If you vote no on either of these measures, then make sure to go put your back into helping our schools yourself. It’s not how much we are paying that bothers me, it’s what will the cost be that has me frightened.

  • Jeffrey Toobi

    I think you would find this debate on props 30 and 38 to be very interesting:

    https://www.youtube.com/watch?v=ORn8mi4Etmg