Sacramento Capital. (Justin Sullivan/Getty Images)

Proposition 31 might win the battle for the longest and most complex ballot measure. At more than 8,000 words Prop. 31 is an opus to California Forward‘s attempt to restructure and rebuild California’s government from the core. To do that it outlines nine main changes:

1. Establishes a two-year budget cycle
2. Permits the governor to make unilateral budget cuts during fiscal emergencies
3. Requires all bills to be published three days prior to a vote
4. Forces lawmakers to identify a funding source for new programs or tax deductions
5. Requires performance reviews
6. Defines specific goals for the state budget and all local government budgets
7. Allows local governments to establish “Community Strategic Action Plans”
8. Allocates $200 million a year in sales tax to those plans
9. Allows local governments to transfer local property taxes among themselves.

Whew, that’s a lot.

But one component of the initiative is particularly opaque: What are these “Community Strategic Action Plans”? What are they supposed to do? KQED called California Forward’s Executive Director Kristin Connelly to ask her specifically about the plans. California Forward wrote and sponsored Prop. 31.

We also spoke to one of the plan’s detractors, Wendy Mitchell, a member of the California Coastal Commission and who serves on the board of the California League of Conservation Voters.

Below are transcripts of those conversations, edited for clarity and length:

Lisa Pickoff-White, KQED: We’ve had readers and listeners contact us with questions about Proposition 31′s Community Strategic Action Plans. What are they and what are they meant to do?

Kristin Connelly: What we wanted to do is put forth a plan for what works. The Community Strategic Action Plan really comes from local folk involved in delivering services, at the local level, who said that they could do a better job if they had some flexibility and were allowed to integrate services, which evidence shows leads to better outcomes.

The plan is a voluntary component in Proposition 31; nobody has to do a Community Strategic Action Plan. It’s not a regional government — there’s a lot of misinformation there about Prop. 31 — but there are appropriate levels of oversight. Everything has to happen through a majority vote of the local jurisdictions of the community governments that are opting to participate.

The idea is this:  if a majority of the cities in a county and the school districts representing a majority of the students [in that county] want to work together to solve problems then they can. If there is some sort of state regulation or a statute that interferes with their ability to deliver those state funded services they can propose a community rule in order to administer those services.

So these governments come up with a plan, and each jurisdiction has to approve it by a majority vote of their boards. Then once a county and all the local governments have taken all the steps to put together their plan, the legislature still has an opportunity, or relevant state agency if there’s a particular regulation that a community is seeking a community rule on. They have 60 days to review the plans and veto them to say you know what you didn’t meet the mark or there’s something that’s not working and you need to do a better job. Then it goes back to community, and doesn’t go into effect.

The clock for the legislature doesn’t start to toll if the legislature isn’t in session. We tried to make this as flexible for the local governments as possible, impactful, and a process that makes sense.

Pickoff-White: You’ve said that you based this on other projects. What are those projects?

Connelly: Since the 1990′s 11 counties have taken advantage of a series of small-scale pilot projects. Fresno used this authority to develop a strategic plan to coordinate its efforts to improve youth outcomes. They created seven neighborhood resource centers that provided integrated public safety and health services. They received waivers so that they could pool several state and federal funding streams to support them. Since then more students are scoring above the 50th percentile on the SAT, crime is down, school attendance is up.

Another example, Marin County they created a youth pilot program devoted to reducing placements in the county’s very costly foster care programs. The pilot program received permission to pool resources from two state funding streams and to alter Medi-Cal requirements. The state allowed Marin to keep the savings it generated so that created an incentive for them. Their program has been successful for 90 percent of the children it served. In 2004 the county was able to hold onto the estimated $900,000 in savings it generated by improving results.

Pickoff-White: If there are already counties and districts that are changing these programs and able to change the funding streams then why do we need these Community Strategic Action Plans?

Connelly: We wanted to be able to bring it to scale. So it’s an opportunity and not just done on a piecemeal basis. The measure provides important incentive funding [$200 million]. This money is meant to be planning money and collaboration money to incentivize counties, cities and communities to facilitate this collaboration. We have no way of knowing how many counties will avail themselves of this and our hope is that we’re going to create an echo chamber here and that our success will foster others. Counties can encourage one another to participate in this manner.

Pickoff-White: Some of your detractors including the California League of Conservation Voters and the League of Women Voters and the Federation of Teachers have argued that Prop. 31 would hurt education, environment, health and other priorities.

Connelly: We respectfully disagree. The Community Strategic Action Plans don’t apply to very important environmental provisions. It’s about state funded programs and the manner in which the programs are funded. There’s a disagreement there. Personally I tried to get styrofoam banned from Contra Costa County as a young person. I care a lot about the environment. I’m a true environmentalist, so I wouldn’t be supporting Prop. 31 if I didn’t think that it had lots of benefits.

The cycle that we’re in is not acceptable and it needs to improve. We really believe that Prop. 31 is a great way to get there.

Pickoff-White: What kinds of checks and balances do you have?

Connelly: I think one of the important things about Proposition 31 that many people don’t talk about is performance based budgeting and what it requires in actually focusing on results and reporting those. What we’re trying to do is focus the budgets of the state on stuff that works and is getting things done for Californians. We’re not imposing some new structure of government or some regional collaboration. The Community Strategic Action Plans that I was speaking about are a voluntary component of the measure. We think it’s a great opportunity, but it’s not going to be imposed on people. We did not want to have a one-size-fits-all approach there.

Some of the questions that we get — and concerns from detractors — come from misunderstanding how the measure actually works. The reason I mention performance-based budgeting and all the transparency components of Prop. 31 is that I think we have the opportunity to turn the page to a new era of governance where we really have changed the culture, where we focus on results and see what we’re getting rather than what did we spend last year. Let’s see what works and what are we getting with the investment of our tax dollars. How government chooses to spend its tax dollars is among the most important decisions that leaders make. We think this is an important step forward.

***

Wendy Mitchell is a member of the California Coastal Commission and serves on the board of the California League of Conservation Voters.

Pickoff-White: You’ve come out against Proposition 31 and one of the reasons you cited was the Community Strategic Action Plans. Why?

Mitchell: This initiative was couched as reform. Everyone wants reform, and the state of California certainly needs reform. However, one of the fundamental stumbling blocks to this initiative, and why the environmental community and the League of Women Voters — and others — are opposing this, is because of these Community Strategic Plans.

They’re great buzz words, but what would happen is it would allow a county board of supervisors to adopt a Community Strategic Plan. Then, if they determine that a state law or regulation was impeding this Action Plan and their ability to achieve it, they could then determine their own community rule. That would be a functional equivalent of what the state law was.

What is going to happen with that is multiple things. One, you’ll have communities that will not be consistent with state law. Our environmental laws, our worker safety laws, our health and human services laws can be in jeopardy. You have everyone — 58 different counties — passing different rules to apply state laws.

And then most importantly you’re going to have litigation on every single Community Strategic Plan and community rule because it’s not clearly defined in the legislation. The local governments and everybody is going to litigate. So the courts are going to decide. It’s going to throw all development in local communities into a tailspin.

Pickoff-White: California Forward argues that these plans are optional. No one is forcing communities into these.

Mitchell: That is true. But it also sets aside $200 million — takes it out of the state budget which is already seriously in jeopardy — to allow local governments to do these Community Strategic Plans. Some may, some may not. But we can’t run the risk of local communities making plans about how they adhere to state laws.

That wouldn’t be good for the business community. I know the conservative right wing is opposed to this, as well as liberal Democrats. It really doesn’t work for anyone in the state of California and it isn’t good for business because you’re going to have different counties in the state. And the litigation alone is going to take decades to get sorted out.

So yes, it is optional. But the environmental community, the League of Women Voters and newspapers up and down the state have come out in opposition to this initiative.

Pickoff-White: I spoke to Kristin Connelly, California Forward’s executive director, about this and she said that what this does is allow communities to do what they need to do, and decide what’s important to them. She pointed out several examples in education, specifically in Fresno, where this has worked out. Do you think communities need a way to change these restrictions to work together?

Mitchell: I think certainly local communities have very big input. As you know they do all the zoning, they create plans around housing, etc. They have a large role, the local government. The people have their elected representatives at the state level as well.

But creating a patchwork in which schools in one county are administered one way and schools in another county have a totally different threshold for passage of classes is a recipe for disaster. If everyone is going into vocational college, community college, UC or CSU they need to have the same foundation of education. And while local governments and local school boards have a role in that, there is consistency throughout the state because of state regulations and state statutes.

Pickoff-White: The measure does allow state agencies and the legislature to say, “No, we’re not going to allow you to make these changes.” Do you think that prevents some of the problems you’re talking about?

Mitchell: I think that’s not realistic for the timeline of how government actually works. First of all the state legislature is out four months of the year. So it’s a 60-day timeline to vote up or down. Organizations like the Coastal Commission, if they created the functional equivalent to the coastal act, we only meet every 30 days, so being able to review and act upon that in a timely manner just isn’t feasible. I think that pays lip service to the issues that I’m raising, but it doesn’t solve the problem.

Learn more about Prop. 31 in KQED’s Proposition Guide.

(Rex Sorgatz: Flickr)

From the get-go, the face of Richmond’s proposed tax on sugar sweetened beverages has been city Councilmember Jeff Ritterman. “If we’re successful we’ll make history,” he tells me.

Ritterman is a retired cardiologist who got the council to put the penny-per-ounce tax on next month’s ballot. He says improving the health of the local community isn’t the only goal.

“Once the sugar-sweetened beverage taxes become ubiquitous — and I’m pretty sure they will, it’s just a question of when,” he says, “if we are victorious it will happen a lot sooner.”

But the health issues behind the tax have taken a back seat to questions about how the city will spend the money the tax would raise.

The main argument from Measure N opponents is that the tax proceeds won’t necessarily go to fight obesity. While there is an accompanying measure before voters to direct the money to obesity-fighting efforts, the money raised would go into the city’s general fund. Billboards and flyers all over town — paid for by the American Beverage Association, a soft drink lobbying group — drive that “general fund” message home.

Chuck Finney is spokesperson for the Community Coalition Against the Beverage Tax, funded mostly by the soda industry. The group has spent more than $2 million to defeat Measure N.

“This tax isn’t gonna effect the bottom lines of these companies,” Finney told me. “But their brands and reputations are on the line in a bigger debate right now in this country.”

It’s not just the soda companies that have gotten involved. I visited the only movie theatre in Richmond, the Century Theatres, which is owned by Cinemark, a national chain. They’ve donated to the “No on N” campaign; there are “No on N” signs in the parking lot; posters inside the theatre; the employees are wearing “No on N” t-shirts; and before each movie, a short ad plays about Measure N.

In the ad, a voiceover intones, “Measure N, the Richmond beverage tax, is unfair. It hits people who can least afford it the hardest, and there’s no guarantee the money will be spent as promised. Millions of new taxes, and not one dime guaranteed for our kids.”

Then viewers hear the sound of screams, followed by the encouragement: “On November 6th, vote ‘no’ on Measure N.”

After watching a movie, I ask if people remember the ad and what they think of measure N.

“I’m not for it. I wouldn’t vote for it,” Karen Koistenen tells me. “I don’t think there are any promises for the kids, and I think that’s important. I think parents have a right to work with the kids on what they eat and drink, not the government.”

Joe Maietto tells me he had heard about Measure N on TV, and remembers the ad from before the movie he has just seen.

“I think it’s ridiculous. We pay enough taxes,” he says. “A lot of things are bad for you, that don’t mean you gotta tax all of ‘em.”

Kenneth Wilkerson, pastor at The House of Prayer Ministries said, “It’s not right for the city to try to charge us and then we don’t know where the money is going.”

When I ask him if it matters to him who paid for the ad, he said no. “Chevron, soda companies, it doesn’t matter. It was informative. I’m going to be voting no.”

Other moviegoers — a dozen altogether — all said they were opposed to Measure N — even though most of them acknowledged the negative health effects of soda.

“Yes on N” supporters, who have only raised about $50 thousand, have tried to portray the issue as local David versus out-of-state, corporate Goliath. They mention the Beverage Association in the same breath as Chevron — another corporate heavyweight in local elections.

Andres Soto is the Richmond organizer for the social justice group Communities for a Better Environment. “The American Beverage Association appears to be trying to ‘out-Chevron, Chevron,’” he says “when it comes to campaign spending in Richmond.”

Soto believes Richmonders are fed up with seeing their elections flooded with corporate cash. “This is gonna be another lesson that it’s not always gonna work,” Soto says, “especially in an enlightened community like Richmond — which has been not only the subject, but (also) the target of this kind of corporate spending for some time.”

Whether the soda industry’s spending has been effective won’t be known until the votes are counted. But even if Measure N passes, the industry can’t claim its message has not been heard.

Through the studio glass: Michael Krasny hosts KQED's daily call-in show "Forum."

Here at KQED, we take elections pretty seriously. It’s a time when our mission of educating the public comes to a head — the messages coming from the campaigns are unrelenting and taken as a whole can present a confusing picture. So helping you cast an informed vote is our aim.

That was the philosophy behind our state proposition guide. Some people, however, prefer listening to reading. For those folks we present a complete archive of Forum’s 2012 state proposition shows. Some are an hour long, some are half an hour, but all present views from both sides and include community input we received via calls, emails, Facebook and Twitter. So sit back, turn up your speakers, and take a listen…

Prop. 30: Gov. Brown’s Tax Increase for Education, Public Safety

Prop. 31: Revises the State Budget Process

Prop. 32: Campaign Finance Reform or an Attack on Unions?

Prop. 33: Changes to Auto Insurance

Prop. 34: The Death Penalty in California

Prop. 35: Ban on Human Trafficking and Sex Slavery

Prop. 36: Should Three Strikes Be Changed?

Prop. 37: The Fight Over GMO Labeling

Prop. 38: Molly Munger’s Tax Initiative for Education

Prop 39: How We Tax Multi-State Businesses

Please note: Forum did not produce a show on Proposition 40. You can find more information on that here.

The Arizona group that dumped $11 million into California’s ballot measure melee this week is led by a Republican activist who calls labor unions “the parasite that is killing our jobs.”

Americans for Responsible Leadership was formed last year by three Arizona businessmen, including Graham. The other directors are Eric Wnuck, who ran an unsuccessful campaign in the Republican primary in a 2010 congressional race, and Steve Nickolas, a bottled water entrepreneur. 

“These are not household names even to politicos like me,” said longtime Arizona political analyst Michael O’Neil. “This is not the political A-team.”

O’Neil added: “It sounds like they are a front organization, and the real question is where do they get their money from.”

The group is organized as a nonprofit organization that doesn’t have to disclose its donors. The group’s directors did not respond to requests for comment.

Beth Miller, spokeswoman for the Small Business Action Committee, which received the $11 million donation, said the committee does not know who funds the group.

“You’ll have to ask them as to where their funding is coming from,” she said.

Americans for Responsible Leadership has also injected money into two of Arizona’s ballot measures this year. It gave $500,000 to oppose a 1-cent sales tax for education funding. And it spent $75,000 to oppose a measure that would create an open primary system where voters could vote for candidates of any party and the top two vote-getters would advance to the general election. California has a similar top-two system that voters approved in 2010.

“Outside special interest groups are trying to take away our freedoms,” Graham said in a video opposing the top-two initiative. “Do you want California politics in Arizona? … I don’t want Arizona to have to deal with the same mess California is in.”

Graham, who has a wealth management company in Scottsdale, is running to lead his state’s Republican Party with a pledge to “respect the grassroots conservatives and Tea Party members who have infused our Party with energy and recommitment to conservative ideals.”

Graham also ran an unsuccessful campaign in the 2010 Republican gubernatorial primary, as a relative unknown. He has a company called Freak Show Racing. And he is the author of “Job Killers,” a book about “How Labor Unions are Destroying American Jobs and the Economy.”

“Striking labor unions out of the business model is imperative to the economic success of today’s ever-changing marketplace,” he said in a video promoting the book. “Then, and only then, will we truly be able to free ourselves of the parasite that is killing our jobs.”

Labor unions in California are pouring tens of millions of dollars into the same state ballot measures that Americans for Responsible Leadership is targeting – but on the opposite side.

The California Teachers Association and the Service Employees International Union combined gave $16.5 million to Prop. 30, the governor’s tax increase, according to campaign finance tracker MapLight.org. The two labor giants also gave $32 million to defeat Prop. 32.

Unions have much at stake. While Prop. 32 prohibits both labor and corporations from using payroll deductions for political purposes, critics say it would disproportionately hit unions, which commonly use member dues to finance robust political operations.

A new report by public policy group California Common Sense found that labor unions fund far more independent expenditures in state political races than other sectors.

Special interests can spend unlimited money on political ads if they are independent of candidate campaigns, and such expenditures have shot up over the past 12 years. Since 2000, unions spent $90 million in this way, compared with $27.7 million by the business sector, according to the report.

Businesses, however, tend to outspend unions when it comes to direct candidate contributions, said report co-author Mike Polyakov.

“I think the influence that money generally and independent expenditures specifically have on our political system is something that should cause concern to the public,” Polyakov said.

Will Evans is an investigative journalist for California Watch.

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.

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.

Yes on Richmond soda tax mural, by artists Mike Rich with Chris Khali of "Dunk the Junk." (Photo: Kristin Farr)

Two California cities – Richmond in Northern California’s Contra Costa County and El Monte in Los Angeles County — have proposed a one-cent-per-ounce tax on sugar sweetened beverages, including sodas and energy drinks. The Community Coalition Against Beverage Taxes (funded by the American Beverage Association) has spent approximately $3.5 million to defeat the measures. The coalition argues that it’s a tax on the poor, and it will hurt small businesses.

Argument against the sugar-sweetened beverage tax include that it is a tax on that poor & will hurt small businesses. (Photo: Kristin Farr)

In Richmond, non-profits like Fit For Life and the Richmond Progressive Alliance are urging the community to vote yes on Measure N on November 6th. They argue the tax is a step forward for the city, and that revenue for the taxes can be used to fight childhood obesity.

I visited Richmond Main Street’s Spirit and Soul Festival and the city’s Certified Farmer’s Market to see what some Richmond residents thought about the measure. Most of the people I approached didn’t know about the tax, and many were undecided. Below are three responses from people in support of the proposed tax, and three in opposition.

NO ON MEASURE N

Keira Chatman-Green:

“I think that it is absolutely ridiculous. If I have a Diet Pepsi and I want a Diet Pepsi, I’m gonna get it. If the soda cost a dollar and then I had to pay a dollar fifty or something to that effect, I’m going to pay it ‘cuz I want a Pepsi. Healthier food is more expensive than junk foods. So I can definitely see if they raise the taxes on junk food and lower the taxes on healthier foods such as vegetables and different fibers and different stuff like that, than that would make more sense. But just taxing junk food alone? Absolutely not. I think that the focus should be on education and children and raising the children, period. And stopping the violence in Richmond. Instead of soda, and chips and cookies.” Dionicio Arechiga:

“Right now I’m working at La Flor de Jalisco Market. It’s on 21^st and MacDonald Street. We sell a bunch of groceries. The majority of clientele is Mexican people. Our sales are pretty decent. We make enough money for the size of the store that we have. Our biggest sales come from the deli and the sodas, because we have a burrito truck outside. If this tax passes our concern is that people will buy less sodas. We do not sell alcohol here. We also do not sell tobacco or lotto tickets. So if the soda tax hurts us on that side than we might have to look for other markets and probably sell liquor and beer, and that not gonna help Richmond out.”

Priscilla Ford:

“It’s not gonna stop people from buying soda, they’re gonna drink what they wanna drink. I’m mean, there’s taxes on many things. Look at the gas prices – has it stopped people from driving yet? No. Look at the toll plaza. You gonna do what you have to do it. I don’t drink soda a lot but if decide I want a soda, I’m gonna buy that soda. If you don’t want your family to drink soda you have to stop by buying. It’s up to the home to do what they’re gonna do. It’s not up to the store owner or the tax payers or whatever. It’s up to one individual, ‘Are you gonna drink this soda or are you not gonna drink this soda?’”

YES ON MEASURE N

Jed Kreinberg:

“We have an epidemic of sugar consumption in this country, I think. It’s a real health issues with the youth of today. And what I’ve noticed is that there’s a huge influx of out-of-state money, and money from the large corporations to defeat this initiative because it’s in their best interest to keep selling people poison. It’s like with the cigarette tax. You know I mean that’s the analogy I would use. People have to see the costs involved. There’s a hidden cost. We can pay it up front or pay it later. Your kids could get fat, or you can teach them to eat right.”

Colin Johnson:

“I hear a lot of negative comments about how it’s gonna damage small business, and how you know it’s a tax on the poor. But to be perfectly honest I feel that obesity is such an issue. I mean we’re not exactly a high income family, but I feel like that money could be spent on different beverages that are not sweetened. I mean, I don’t know if I buy that is an attack on low-income families. I kind of think of the tax almost like an additional concern when I make a purchase. “Is this something I really want? Is this something I really need?” We’ve done the exact same thing with tobacco, and Big Tobacco is doing fine and people who sell tobacco are doing fine. We increase taxes for alcohol and tobacco because we realize there’s an issues there and I feel like we need to make some similar movement on sweetened beverages.”

Marilyn Langlois, running for Richmond City Council:

“I am a very strong supporter of the sugar-sweetened beverage tax in Richmond that will be on the ballot. I think it’s going to put Richmond at the cutting edge, at the forefront of health promotion in the country. We really have a problem with diabetes and obesity and this is really doing something positive to educate people about the really negative impact of drinking excessive sodas. I’m all for it. I think a lot of people have stopped drinking sodas already and this will really educate them some more. It will raise money that we can then use for more healthy sports and recreation programs. So I think it’s a win-win. Buying soda is a discretionary expense, nobody has to buy it. If there’s a financial hardship they could just cut back a little bit, or drink water. And those who really do want to drink soda, they can do so knowing that little part of the money they spend on their sodas is going to help some really good programs for our kids.”

San Franciscan Tom Steyer spending millions of his own money to support Prop. 39. (Photo: Erik Anderson)

San Francisco hedge fund manager Tom Steyer has already fought and won a battle at the California ballot box. In 2010, he helped defeat Proposition 23. That measure would have rolled back California’s landmark global warming law. Now he’s putting $20 million of his own money into passing Proposition 39.

“It’s about tax fairness,” Steyer says. “We are closing a loophole, but all we are asking out-of-state companies to do is to pay taxes on their income exactly the way that we do. And what that will do is bring into the state of California over a billion dollars every single year, and all from companies from out of state.”

The Legislative Analyst’s Office has estimated that’s the amount of revenue the tax-change will generate. The LAO also said that “while only a small portion of corporations are multistate, [they] pay the vast majority of the state’s corporate income taxes.”

The history of Prop 39 is rooted in a change in the tax code that the California Legislature made in 2009. That’s when lawmakers gave companies a choice of how to pay their corporate taxes, says San Diego State University business professor Steve Gill.

“For years and years and years, we had a long tradition of using a three-factor apportionment formula,” Gill says, “which meant we look at three different factors that are economic drivers of income: sales, property and payroll.”

But three years ago lawmakers changed the rules to allow companies to base their corporate tax on sales only. And that’s the route most California-based companies took because they ended up paying less. But for some multi-state companies, it was the old formula that saved them money, because they don’t have a lot of property or payroll here.

“Clearly they are disadvantanged by a single-sales factor, and would prefer to keep the old three-factor formula.”

So Prop 39 eliminates the choice of which method companies can use, mandating they pay based only on sales.

That got the attention of four major corporations: GM, Chrysler, Kimberly-Clark and International Paper were quick to speak out against the initiative when it qualified for the ballot. So the Prop. 39 campaign singled them out in ads stating that they were “fighting to keep a billion-dollar corporate tax loophole that gives tax breaks to companies for shipping jobs out of state.”

But the firms lacked the stomach for an expensive ballot box fight in California, and they dropped their opposition. Steyer pulled the ads after the companies contacted him.

“Some huge major American corporations have sent us letters — who we thought might be in opposition and who we were prepared to try and debate — sent us letters saying, you know what — it is tax fairness. We recognize what you’re doing is correct. We have no intention of opposing you.”

Steyer says that is allowing him to run a positive campaign about fixing two long-running California problems: tax revenue and jobs. He says the measure will generate a billion dollars more for the cash-starved state, and that it earmarks half that money for the creation of green jobs over five years.

But both of those potential solutions make Richard Rider shudder. He’s the Chair of San Diego Tax Fighters. Rider says Proposition 39 is a tax hike, plain and simple, and he thinks voters will see that.

“The last eight tax increases that have been on the ballot — statewide tax increases, each of which could’ve passed with a simple majority vote …  have failed. Six of the tax increases failed by double digits.”

Rider says a tax hike won’t dig the state out of its fiscal hole. He argues California needs fiscal discipline, not more money. And he’s not ready to let politicians steer a half-billion dollars a year into green-energy projects.

“It’s not like there’s a bunch of wise, pipe-smoking geniuses up there making those distributions,” Rider says. “It is going to be people who respond to pressures in Sacramento. It is going to be people who respond to political contributions.”

But critics like Rider don’t have the deep pockets to publicly oppose Prop. 39. There will be no slick ad campaign to influence voters. Rider says he’ll have to rely on voters seeing the measure for what he says it really is.

Listen to Erik Anderson’s report:

Learn more about Proposition 39 at KQED’s California Proposition Guide:

Anti-tax advocates are calling foul over Cal State University’s stance on Governor Brown’s tax increase measure, Proposition 30.

The trustees voted yesterday to tie future tuition costs to Prop 30′s fate.

If Governor Jerry Brown’s tax measure passes, the CSU system will roll back a previously approved 9 percent increase. But If Prop 30 fails, the university will leave it in place – and tack on an additional five percent.

Meanwhile, a draft letter from CSU reportedly tells applicants that Prop 30 will affect how many students the university can enroll. That has Jon Coupal  with the Howard Jarvis Taxpayers Association threatening a lawsuit.

“To specifically reference Prop 30 and actually try to predict what happens if Prop 30 passes or does not pass is going beyond an informational activity and gets into the realm of political advocacy,” he says.

A CSU spokesman says the letter is legal.

Gov. Jerry Brown addresses questions from the San Jose Mercury News editorial board. (Image: UStream)

Gov. Jerry Brown sat down with the San Jose Mercury News editorial board today to discuss his ballot proposition to raise taxes for education. If the measure fails, automatic trigger cuts will mean billions cut from K-12, community colleges and public universities in California.

Brown started off with some political history — a little bit of ‘how did we get into this mess — for the assembled Mercury News reporters and editors.

“If you go back to Pete Wilson,” Brown began, “we had a big recession, he had to cut massively and raise taxes massively. And then Davis rode up the high tech bubble and rode it down. That created its own problems and then Arnold came in and he rode the mortgage bubble up and also rode it down. And so that we are caught in waves of prosperity and misfortune. And in that process, the problem has been compounded because the Democrats and Republicans as they try to negotiate a balance, the Democrats want to get some more benefits and the Republicans counter with tax breaks. That then compounds the problem, because you have more spending and less revenue.”

Which brings us to the present and a $16 billion budget shortfall Brown had to balance, just this year. He came up with Prop. 30 which raises taxes on people earning more than $250,000 each year and raises the sales tax by .25 percent. The income tax expires in seven years, and the sales tax lasts four years.

Brown believes a tax was the only way to close the budget hole.

“Instead of the tax, we could have cut, but we’ve already cut a huge amount,” the governor insisted. “We’ve cut 25 percent from higher education. We’re cutting our prisons back, substantially, 30-40,000 people who used to go to prison aren’t going there any more. We cut the money that you give the pensions for blind, the disabled, and the aged — from $850 a month to $835 — cut 15 bucks from some of the poorest people. … If people say, ‘You know what? You haven’t cut enough,’ then we’ll cut another 6 billion; half a billion in higher education, 4, 5-hundred million from community colleges, and over 4 and a half billion K-12,” the governor said, alluding to the trigger cuts if his proposition doesn’t pass. “So that’s it,” he finished off, ”It’s a choice and it’s arithmetic.”

Barbara Marshall, the editorial page editor of the Merc. could barely get her folllow up question started before Brown interrupted.

“Some critics feel as though you’ve skewed the trigger cuts to education to increase pressure to pass … ” Marshall started off.

“And that’s absolutely untrue!” Brown said, “This is the only place left.” He went on to detail still more cuts the state has already enacted — to In-Home Supportive Services, moving children from Healthy Families to Medi-Cal (“no one likes that,” he said), fewer fish and game wardens, his list went on.

The problem with relying on income tax from high earners is that the revenue stream is volatile. Brown acknowledged that the volatility is an issue, but again turned to history to make his case.

“I like to compare the way it was to the way it is,” Brown said. “The way it was — when I was governor the first time — the top 1 percent, 1.5 percent, the top income earners garnered about 8 percent of the collective income of California. Now they take in 22 percent. So you go from 8 to 22. Anyone below that is contributing to their enhanced well being. … So then to ask those who have been most blessed and most fortunate to give back one or two or three percent, from an equity point of view, from a fairness point of view, I’ll even say from a Christian point of view, is perfectly appropriate. From a volatility point of view, yeah the up and down is not what I would like it to, but then what could we do. We couldn’t have a tax then. It’s this or it’s probably nothing.

Learn More:

The non-partisan California Budget Project analysis on Proposition 30

Live stream videos at Ustream