Policy & Finance > Elections

Prop 38 sponsor says ed initiative will upset polls



Confident that Californians will tax themselves to send more money to their local schools, Molly Munger is preparing for “a big air war” – extensive TV advertising to persuade voters to pass Proposition 38.

The Los Angeles attorney is bankrolling the “other” education initiative, one that would  raise personal income taxes by $10 billion to fund K-12 and early childhood education. From the start of the campaign, Munger’s initiative has been trailing in the polls behind Proposition 30, Gov. Jerry Brown’s ballot measure to raise $6 billion from sales tax and the income tax on wealthy Californians. Munger has donated $20 million to the campaign so far and won’t say how much more she’ll spend.

Molly Munger during panel discussion on California education. Photo courtesy of Samantha James, Silicon Valley Leadership Group. (Click to enlarge)

But, in an interview Wednesday, she said she doesn’t view Prop 38 as an exercise in futility. “Do people really think that Steve (English, her husband) and I wanted to make a giant bonfire of our money? Our strategy is that it will take money to get the word out.”

Munger said she isn’t fretting over the polls, which show support for the initiative ranging from 40 to 45 percent, because most voters still haven’t paid attention to details of the plans. But when they learn the specifics of Prop 38, she said, they like it, because it guarantees that the revenue will go directly to schools, under penalty of law.

“People get it now,” she said. “Voters are worried about what has been stripped away from our schools. They are willing and ready to (spend more), but what stops them is they don’t think they can trust Sacramento with their money.” Munger was referring to the scandal this summer when $54 million in unaccounted for money turned up in special funds in the state parks department at the same time budget cuts threatened the future of 70 parks.

In public appearances, Munger is advocating a “yes and yes” stand, urging voters to support both propositions 38 and 30, knowing that only the one with the most votes would go into effect. That position, shared by State Superintendent of Public Instruction Tom Torlakson and the California School Boards Association, at least outwardly discourages sniping between the two sides, to the potential detriment of both.

“It makes a lot of sense to get both concepts out,” said Munger during a panel discussion at an education summit in Mountain View sponsored by the Silicon Valley Leadership Group. “People look at 38 and say, that’s what is needed to fix schools, and 30 would be the insurance policy, the Band-aid approach of the governor.” The revenue from Proposition 30 would go into the state’s General Fund, with a portion going to schools. And, at least initially, she said, Prop 30 doesn’t add to school budgets; instead, it pays off some of the money in arrears owed to school districts. “That won’t get the schools much ahead.”

But in an interview, when questioned, Munger was more blunt, contending that it’s deceiving to say that Prop 30 is for schools. “[The governor] can’t sell education funding because he’s backing an initiative that doesn’t do anything for education funding.”

Proponents of Brown’s plan say that Prop 38 doesn’t address the state’s immediate crisis, a multi-billion-dollar

Education panel at Silicon Valley Education Leaders Summit. From left to right: Paul Warren, Mohammad Qayoumi, Mike Kirst, Molly Munger, and moderator Rachael Myrow. Photo courtesy of Samantha James, Silicon Valley Leadership Group. (Click to enlarge)

General Fund shortfall that will lead to automatic cuts to higher education and K-12 schools if Prop 30 fails. “Proposition 38 does nothing for higher ed. If 30 does not pass, there will be more trigger cuts that will make the situation worse at a time when there already aren’t enough college graduates to meet job demands of Silicon Valley,” Mo Qayoumi, president of San Jose State University, said during a panel discussion. “That is why 30 is so important for the state.”

But Qayoumi, like so many others, hasn’t seen the details of 38, Munger said. During the first four of the 12 years the tax would be in effect, 30 percent or $4.2 billion of the $10.2 billion raised annually would pay off debt on state school bonds, freeing up the money for other General Fund uses. There would be less General Fund revenue this year than under Prop 30 but more money the next three years, according to a graph she showed.

Critics also say that Prop 38 creates a new bureaucracy and more work for schools. The initiative would establish the California Education Trust Fund (CETF), and require local school boards to hold public hearings and solicit input on how to spend the money. According to the Legislative Analyst’s Office, “when the governing board decides how to spend the funds, it must explain – publicly and online – how CETF school expenditures will improve educational outcomes and how those improved outcomes will be measured.”

Tax increases under Prop 38. The dollar increases are before credits (dependent child credits, childcare credit, and renters credit, etc.) so the actual increase for taxpayers with incomes up to $40,000 may be less than shown. Source: Prop 38 campaign. (Click to enlarge)

It’s been 19 years since California voters last passed a broad-based tax on themselves. That was Prop 173 in 1993, a half-cent sales tax increase for public safety services. Prop 30 also raises the sales tax by one-quarter percent, but only for four years. The rest of Prop 30 revenue would come from taxing those earning more than $250,000 per year for seven years. Munger would tax everyone earning more than $7,500, or $15,000 for couples, no doubt a reason it is struggling in the polls at this point. But she said opposition drops when people apply the income calculator at her site and see how a progressive tax works. A couple with an income of $45,000 after deductions would pay on average $146 more (before child care and other credits). (Note: an earlier version mistakenly said they would pay $216; that amount, before credits would be for a family earning $55,000.). A  couple earning $750,000 in taxable income would pay $12,479 more, before credits, according to the initiative website.

Conventional wisdom would call for Munger to give up on an initiative polling less than 50 percent support at this point in a campaign. But the polls have been based on reading respondents a ballot summary and title. The trajectory of support for Prop 38 will be different, she insists, once people learn details of Prop 38. “People are desperate to help schools and they like a progressive tax,” she said. “This is why we have never let ourselves get discouraged.”

Filed under: Elections, School Finance, State Education Policy

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26 Responses to “Prop 38 sponsor says ed initiative will upset polls”

  1. Manuel said

    on September 26, 2012 at 1:29 pm

    I will voting “no” on 38 because it has serious gaps. I do not know which one is worse, but here are three:

    1) for the first four years, it pays for school bonds and other bonds. The other bonds can be for children hospitals (!!) and “general obligation bonds.” In my layman’s opinion, those are ANY bonds and, even though there are some caveats, you know how easy it is to circumvent them,
    2) it will give about 15% of revenues to Early Childhood Education, whatever that is. What I do know is that we don’t have a public-controlled infrastructure that will absorb that level of funding. Therefore, this will turn into a trough for the private sector. Also, are there any sections on the Ed Code on how institutions engaged in ECE are to behave and be regulated?
    3) it pretends that the public will have a say-so on how funds are spent by their local educational agencies. This is done by the LEA holding a meeting at each school where they will take community input, then holding another meeting to inform the community why they are doing what they want to do. The community will just get an “explanation.” This is nothing but pabulum and no different than what is done now: the LEA does what it wants and thumbs its nose at the public.

    Yes, 30 is simply a codification of the sausage that was made by the Legislature and Brown last year and we are being asked to approve it. If we do, we get to stick a few fingers in the dike. If we don’t, the dog gets shot. What will it be?

    • navigio replied

      on September 26, 2012 at 5:51 pm

      The dog was already shot. Now the cat’s neck is on the line. At least 38 will allow us to buy a boat as that dike breaks..

  2. kathie said

    on September 26, 2012 at 12:23 pm

    I will vote for 30, but not 38- because a, if we don’t vote in the $6 billion, that our schools so badly need, that amount will be cut from our all ready struggling schools and b, because with proposition 38, people with incomes as low as $7,000. a year will be taxed. I mean Really?!
    I do, however, feel that people in administration making 5 to 6 times what the average teacher is making, should be getting overviews and the same amount of ‘under the microscope’ scrutiny that our teachers do in the classroom and with their lesson plans. As the mother of an elementary school teacher, I think all tax payers would want to carefully examine any 6 figure salaries. Some of this people are making $300,000.00 a year! I wonder what THEIR pension looks like?

  3. el said

    on September 7, 2012 at 9:10 am

    It seems this post stumbled over a nest of anti-tax drive-by commenters.

    I wonder how many years in a row we have to cut the education budget by 5-10% before the knee-jerk reaction of “you have too much money already” goes away.

    • navigio replied

      on September 11, 2012 at 10:35 am

      I doubt it will ever go away El. Knee-jerk reactions are usually based on anecdotes, and its almost always possible to find an anecdote to ‘prove’ just about anything. Many people actually want to believe schools have too much money, regardless of whether its true.
      ‘Public’ education is no longer free. In our district, parents/community pay for music. They pay for art. They sometimes pay for science. They pay for intervention. They pay for some field trips and buses. They pay for librarians. In some schools, they even pay for more teachers. Its absurd to think education has too much money when things like that are happening, and likely, to varying a extent, all over the state.

      • Manuel replied

        on September 26, 2012 at 1:17 pm

        Wait a minute, didn’t the ACLU just won a court case that decreed that communities do not have to pay for all these “frills?”

        I am shocked, shocked to find out this is going on!!

  4. CarolineSF said

    on September 6, 2012 at 3:51 pm

    As the parent of two California public school alumni and the wife of a public school teacher, I take personal offense at those who blast our “terrible” school system and “terrible” teachers. I dispute and refute your insults and attacks on my family.

  5. Gary Ravani said

    on September 6, 2012 at 3:24 pm

    All the arguments about Prop 30, and you can throw the Munger Initiative in too, whether it’s the “bullet train” excuse, or the ‘pension” excuse, or (now) “it won’t help the schools” excuse, are just what they seem: excuses for why CA has not wanted to pay for the services it gets. Or, I should say, why a small political minority whose overlord is an infamous DC lobbyist, doesn’t want to pay.

    CA ranks about 15th of the states in respect to taxes paid as a percentage of personal income. That puts it closer to the median than to the top. Yes, it does have high personal income taxes, but it is low in terms of property, fuel, tobacco, and alcohol taxes. CA is a very average state in revenues collected, but is far above average in dollars required to support services because of the 2nd highest cost-of-living in the nation. And 70% of state dollars are returned to communities for schools and other services.

    Then, of course, there are corporate taxes which have gone up 68% between 2001 and 2009. This explains why businesses are packing up and leaving the state!

    But! Wait a minute! Corporate profits between 2001 and 2009 went up 192%. This explains why, contrary to the myths spread by the usual business community suspects, business isn’t actually leaving CA any faster than it leaves any other state. And when businesses do leave, they off-shore.

    What Prop 30 will do (as John has explained a number of times for those who read) is stop the trigger cuts initially, and then it gradually increases the dollars going to the schools. You need to “stop the bleeding” before you can usefully make “transfusions.”

    And do the schools need it. Recall that Ed Week, the national education newspaper with no dog in CA’s funding battles, ranks CA as 47th of the 50 states in dollars spent per child in “dollars weighted for regional cost of living.” That sky high cost-of-living again. CA ranks around 30th in “unadjusted” dollars spent per student. This in the context of CA being the wealthiest of the 50 states and the 9th biggest economy in the word. That, by the way, puts CA’s GDP just ahead of the entire nation of India at #10.

    There is no good reason CA cannot match other wealthy states in spending on the schools. And before someone comes up with more tired slogans about how “money doesn’t matter,” remember that the highest achieving states are also the states that spend the most on schools. The states that spend the least on schools are the lowest performing. And, did I mention the highest achieving states are also the states with the highest density of unionized teachers?

    • Rosie replied

      on September 6, 2012 at 8:10 pm

      I am all about funding schools. I’m still a UC student, so every time there’s a trigger cut, I feel it HARD. However, that doesn’t change the fact that Prop 3o provides NO money for schools. Teacher pension funds are the closest any of the money raised will make it to a classroom.That’s not to say I don’t think we have an obligation to fund teachers’ pensions as we promised, but I think it’s wrong to sell a tax increase as a “save schools” measure if that’s not what’s going to happen. I’m not a fan of being lied to.

      • el replied

        on September 7, 2012 at 9:17 am

        Rosie, you should know that even backfill money to pay back the deferrals and to avoid further cuts would be hugely welcomed at this point. Schools are having to hold back spending that is ostensibly budgeted because the state is at this point holding back about 1/3 of the money it’s supposed to send. And without one of the measures passing, we’re told to expect a cut of on order another $400 per student on top of the money we’re supposed to get not actually showing up in the bank account.

        It’s true: if you want to significantly *increase* the money coming to schools, instead of merely stopping the bleeding, there needs to be an even larger funding package.

        But, schools will be much better off if either initiative passes, and the difference will be seen in classrooms.

  6. mcdez said

    on September 6, 2012 at 2:11 pm

    Proposition 38 puts the money right in the classroom, where it belongs. It is time to stop engaging parents and communities in heartbreaking decisions on how to cut more out of our schools and start engaging parents and communities in the important decisions on how we can restore programs and services in every school in California.

    Our children deserve more than just preventing deeper cuts. Our children deserve more than a new normal that maintains school funding at a level way below the national average. Proposition 38 starts to restore the California dream of a quality education for all our children. It truly establishes restoring and increasing education funding as the top priority.

  7. Jordan said

    on September 6, 2012 at 12:59 pm

    Neither proposition 30, nor proposition 38 provide benefits for California. Both will place a HUGE burden on Californians already struggling to survive in the current economic climate. Some supporters state that the tax burden will only fall on rich, and therefore will not affect struggling Californians. This is just not true. Proposition 30 employs an increase in sales tax, which affects EVERY Californian equally, from top to bottom. Proposition 38 raises taxes for EVERYONE making as little as $7,000 a year. Both place a burden on California, that we just can not bear. We need to see increased transparency and fiscal responsibility in Sacramento before they see another cent of our hard earned money. After all, it is their irresponsibility and mismanagement of funds that got us here in the first place. We can not give them EVEN MORE money to squander.

    • navigio replied

      on September 26, 2012 at 5:46 pm

      Actually, it is the lack of willingness for CA voters to prioritize education over virtually any other aspect of state government funding. Its just kids though. They cant do anything about it anyway..

  8. Osahon said

    on September 6, 2012 at 11:47 am

    Prop 30 and Prop 38 are 2 different sheets cut from the same cloth. They both increase taxes on working and middle class Americans who maximize their spending potential already. It’s bad policy, and bad economics.

    California already has one of the highest income tax rates in the nation. We need to find another way.

    • navigio replied

      on September 26, 2012 at 5:39 pm

      The other way will be apartheid education. If youre affluent then deal with your education yourself. If you’re not then you’ll take what the state gives you, or in this case, what it doesnt give you..

  9. Rosie said

    on September 6, 2012 at 11:38 am

    Look, this isn’t some “millionaire” tax. Prop 38 will raise your taxes if you make as little as $7,000 per year. $7k! Last ime I checked, that’s WAY below the poverty line! Has it really come to this? Is this the only way to save education? I don’t think our situation is that desperate. There are PLENTY of places we could cut back–$54 million Parks Department slush fund anybody? Prop 38 hurts those among us who are already hurting. California doesn’t need more of that.

    • Jordan replied

      on September 6, 2012 at 1:03 pm

      We need to see some reforms before they see another penny of our hard earned money!

    • navigio replied

      on September 26, 2012 at 5:37 pm

      Actually, the $54M ‘slush fund’ is restricted for park use (doesnt stop the legislature from stealing it anyway). CA stole over $3B from these kinds of special funds this year alone. Its no surprise that those fund entities try to hide that money. Anyway, the prop 38 tax is a progressive one. If you’re worried about everyone being taxed, then you should be aware that prop 30 increases the sales tax. Of course everyone pays that as well..

  10. Luis Alvarado said

    on September 6, 2012 at 11:06 am

    This is a very long article that pits one tax initiative against another. In the end, they both are bad for Californians. I have one basic argument, the article assumes that we are on a level playing field with the rest of the nation. But, we have one of the highest taxes in the country and raising more taxes will hurt us even more.

    Let’s face it, if the leaders in Sacramento would get some courage and tackle the waste and the powerful unions to being true reform. We would not be in this situation. I hurts me to see these people use our children as hostages. We have to see that we hold the cards, not them.

    • navigio replied

      on September 26, 2012 at 5:33 pm

      If you want to talk about playing fields as compared to the rest of the nation, then note that CA has the lowest staffed and worst funded education system in the country. Prop 38 must pass to try to alleviate that at the school site level. Prop 30 must pass in order to prevent further cuts to education overall. Of course both cant pass so CA kids are screwed one way or another. And voters are really worried more about their taxes than whether CA kids have opportunities that exist in the rest of the country? Hmm

  11. el said

    on September 6, 2012 at 10:13 am

    Both initiatives will be helpful. Both are flawed.

    Freeing up money to pay back the billions owed to schools will help – schools can’t spend promises. Ending the prospect of cuts will help. New money will help.

    Munger’s initiative has several assumptions that are damaging, mostly along the lines of assuming that districts all made the “wrong” cuts and that they were mostly in classrooms. Districts who cut administrators way back beyond what’s sustainable won’t be able to use the money to replace them even if the school community agrees it’s the most important use of the money. Districts where teachers took significant pay cuts can’t use the new money to restore those salaries. If Munger believed in the importance of decision making at the local school level, it’s frustrating to see her not trusting those committees to make decisions that are right for that school.

    • navigio replied

      on September 26, 2012 at 5:20 pm

      Hi El. My guess is she did this because people would be less willing to vote for something that did not place a restriction on administrative uses.

  12. jordanmagill said

    on September 6, 2012 at 8:53 am

    Spins aside, the truth remains. Prop 30 will do NOTHING for education funding. Politicians scream otherwise, but Prop 30 means ZERO new funding for classrooms. Like the lotto before it, Prop 30 doesn’t help schools, it only raises cynicism among already jaded Californians.

    • Jordan replied

      on September 6, 2012 at 1:03 pm

      Exactly. Why cant they just be honest about where the money will go? O yea, because then no one will support it! I am tired of the lies. We deserve the truth.

    • Osahon replied

      on September 6, 2012 at 11:49 am

      Exactly! We need to plug the leaks before we pour more money into our broken school system. Our current status quo consists of terrible schools with terrible teachers and administrators who have terrible pension benefits.

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