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.
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
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.”
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.”