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Tuesday, July 31, 2012

Something to keep in mind from our colleagues at UC-Irvine


People with exceptional memory recall, have different brains

People who can easily recall every moment of their lives have different brains than others, a new study has claimed. University of California-Irvine scientists have found fascinating differences in the brains and mental processes of an extraordinary group of people who can effortlessly recall every moment of their lives since about age 10, the 'Science Daily' reported. The phenomenon of highly superior autobiographical memory first documented in 2006 by UCI neurobiologist James McGaugh and colleagues in a woman identified as "AJ" has been profiled on CBS's '60 Minutes' and in hundreds of other media outlets.

..The researchers have assessed more than 500 people who thought they might possess highly superior autobiographical memory and have confirmed 33 to date, including the 11 in the paper, according to the journal.  All had variations in nine structures of their brains compared to those of control subjects, including more robust white matter linking the middle and front parts.

…However, these people with exceptional autobiographical memory did not score well on the routine memory tests. Only when asked about public or private events that occurred after age 10, "they were remarkably better at recalling the details of their lives," said McGaugh, senior author on the study.


These folks couldn't be UC-Irvine grads, could they?
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The Tax Battle Begins

The tax initiative battle seems to be beginning. A couple of weeks ago, we posted a YouTube ad favoring the governor’s tax initiative.* It was longer than a typical 30-60 second TV ad, but probably provided a clue to what the TV pro-initiative ads would emphasize. We now have a radio ad from the Howard Jarvis Taxpayers Assn. which suggests that the anti side will emphasize public pensions, public-sector unions, and the cost of the governor’s high-speed rail plan. The radio ad doesn’t specifically name the governor’s tax plan and could just as easily be seen as opposition to any of the three tax initiatives on the November ballot.

The ad is also somewhat reminiscent of ads run for Gov. Schwarzenegger’s “Year-of-Reform” initiatives in 2005, all of which failed at the ballot. It seems more focused on issues that appeal to already-anti-tax voters than to middle-of-the-road types which is a bit odd since polls indicate that passage of the governor’s tax plan is a toss-up at this point and it’s the middle that will decide things.  Still, as noted, it is a toss-up.
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The new radio ad can be heard at the link below:   
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Monday, July 30, 2012

UCLA's Capstones Reviewed in Chronicle of Higher Ed

Every UCLA undergrad with a dollar bill can see a capstone. Indeed, that particular capstone can see him/her, or so it appears.  However, the Chronicle is reviewing capstone courses and their merits and demerits.

College Too Easy? UCLA Makes It Tougher
By Dan Berrett (excerpt): During a review of undergraduate programs at the University of California at {sic] Los Angeles, Judith L. Smith was struck by an uncomfortable realization: Too many majors demanded too little from students. Some students could graduate without ever taking a senior seminar or completing a substantial research project. The result, says Ms. Smith, vice provost for undergraduate education, is that students could "be pedestrians and walk through the major."  Just as UCLA had done when it revised its general education requirements, the university saw that it needed to reboot its upper level undergraduate courses. The institution coalesced around the idea of capstones, which are cumulative projects that students complete near the end of college... [The article goes on to discuss capstone offerings in different departments and their pros and cons.]

Full story at
http://chronicle.com/article/College-Too-Easy-UCLA-Makes/133187/

Cheery Twitter Account

Here is a cheery Twitter account you can follow which features notes and photos of failed businesses and empty stores in Westwood, just south of campus.  (It does note new business openings as well.)
https://twitter.com/westwoodisdying

Taxes, Taxes: News on the Tax Front

The Sacramento Bee today is reporting various news on the tax front.  As readers of this blog will know, there are three tax measures on the ballot: the governor's plan which the Regents recently endorsed, the Molly Munger school tax (Prop 38), and a close-corporate loophole tax (Prop 39). Folk wisdom has it that where there are too many measures on the same subject, voters may reject all of them in confusion.

In part to overcome that confusion, the legislature passed a bill that effectively put the governor's plan as the first initiative on the ballot (Prop 30). In order to do it by majority (not supermajority) vote, the bill was ostensibly made into a budget enactment by including a nominal $1,000 appropriation. This action was challenged in court by Munger - who feels her tax is being disadvantaged - and the Howard Jarvis Taxpayers Assn. - which is anti-tax.  Munger apparently dropped the challenge but the Jarvis group continued it.  There will be a hearing today, it is reported in the Bee.  See:
http://blogs.sacbee.com/capitolalertlatest/2012/07/california-legislature-submits-its-own-defense-of-ballot-reordering-bill.html

It is clear that Munger has the money to run a campaign for her tax. Apparently, the supporters of the close-corporate loophole tax have some money, too. They took a full-page ad out in the Bee:
Sac Bee Ad - 7-26-12 - Final

The state Democratic Party endorsed the governor's plan which is no surprise. It was less clear what it might do about the other two but it has now opposed the Munger tax and decided to be neutral on the third tax on corporate loopholes.  See:
http://blogs.sacbee.com/capitolalertlatest/2012/07/california-democratic-party-endorses-jerry-brown-tax-initiative.html

And there is also news related to the tobacco tax that narrowly lost on the ballot in June. A recount was requested and the result is to be reported today:
http://blogs.sacbee.com/capitolalertlatest/2012/07/am-alert-yes-on-proposition-39-campaign-throws-down-gauntlet.html

What does it all mean? All we can say is that no one likes the tax man:
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Don't Click

You may receive an email which starts with:


Dear Bruin OnLine E-mail user,

This is to inform all users that our server upgrade/maintenance is scheduled for August 30 2012. You may experience login problems during this period. We are having congestion due to various anonymous account registrations and on this note, we are deactivating some accounts that are no longer active and your account may be deactivated if no action is taken...



It gives you a link to click.  Don't do it.  It is spam and may be malicious.


Sunday, July 29, 2012

Solar Power Breakthrough Reported at UCLA

The LA Times carries an article today on a new solar film being developed at UCLA: (excerpt)

One of the holy grails of solar cell technology may have been found, with researchers at UCLA announcing they have created a new organic polymer that produces electricity, is nearly transparent and is more durable and malleable than silicon. The applications are mind-boggling. Windows that produce electricity. Buildings wrapped in transparent solar cells. Laptops and phones – or even cars or planes – whose outer coverings act as chargers. It might even be sprayed on as a liquid. The promise of cheap and easy-to-apply site-generated solar electricity might now be a lot closer to reality. Of course, the idea of solar films and solar plastics is not new. The breakthrough to making a transparent film, however, came with isolating only one band of light in the spectrum.
“[A solar film] harvests light and turns it into electricity. In our case, we harvest only the infrared part,” says Professor Yang Yang at UCLA’s California Nanosystems Institute, who has headed up the research on the new photovoltaic polymer. Absorbing only the infrared light, he explains, means the material doesn’t have to be dark or black or blue, like most silicon photovoltaic panels. It can be clear. “We have developed a material that absorbs infrared and is all transparent to the visible light.”...
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March on the Japanese Garden!

That's Fredric March. (Young folks can Google him.) Yesterday on this blog, we provided Winston Churchill's advice to UCLA on the Hannah Carter Japanese Garden, now that a court has blocked the sale.


Here is what Fredric advises along the same lines as Winston:

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Saturday, July 28, 2012

We Repeat Our Earlier Observation: Jaw Jaw Is Better Than War War on the Japanese Garden

Yesterday, this blog posted news that UCLA’s proposed sale of the Hannah Carter had been halted by a court decision.  A quote from the decision which sends the case for trial in the future:

Plaintiffs sufficiently establish a reasonable probability of prevailing on the merits of this action based on their characterization of the transaction as an enforceable contractual exchange of consideration between UCLA and Edward Carter. In exchange for conveyance of the residential parcel, Carter accepted UCLA’s promise to keep the Garden Parcel as the Hannah Carter Japanese Gardens in perpetuity. Plaintiffs also establish that UCLA has breached the 1982 Amendment by selling and dismantling the Gardens and taking steps to sell the Garden Parcel entirely, including obtaining a probate court judgment allowing them to sell the Garden Parcel. (pdf page 7 at link)

The full decision is at the link below for legal beagles.  But Winston Churchill’s advice from the headline to this post and from our May 12, 2012 post on this matter (see http://www.bartleby.com/73/1914.html and http://uclafacultyassociation.blogspot.com/2012/05/winston-churchill-on-japanese-garden.html) might well be heeded by UCLA before getting into more expensive litigation.  

Looking for a compromise with the plaintiffs – rather than pursuing a legal battle which the court decision indicates UCLA is likely to lose – would be the appropriate path. As we noted in the hotel case (apparently to no avail), there are usually alternatives if only one takes a deep breath, pauses, and explores them. The search has to be genuine, of course, and not the supposed exploration for show that went on in the hotel affair.

Compromise is part of life. Try it, UCLA.  You might like it:
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Friday, July 27, 2012

Sale of Japanese Garden Stopped by Court Ruling


From the Beverly Hills Courier website: Supporters of UCLA maintaining the Hannah Carter Japanese Garden received their largest victory to date when L.A. Superior Court Judge Lisa Hart Cole today ruled to grant a preliminary injunction halting the sale of the Bel Air garden.  The injunction enjoins the Regents from selling the parcel they contractually agreed to “maintain in perpetuity” in 1982 pending a definitive ruling on the lawsuit filed by the heirs of Hannah Carter to permanently halt the Garden’s sale.

…The 1.5-acre Garden has been at the forefront of controversy since UCLA undertook efforts to sell the Zen-like retreat and adjacent residence just one year after Carter’s death. Both properties were willed to the University by former UC Regent Edward Carter in 1964 and had been listed for sale by Coldwell Banker for a total of $14.7 million.

David Moran, the Manatt attorney representing UCLA, told Cole that the university was unlikely to proceed with the sale of the residence without the garden.  In anticipation of a possible trial, which Moran said could take up to a year, Cole required the defendants to post a $110,000 bond within 10 days, at which time the injunction will become effective…

…“A charitable trust is dependent on the intent of the donors,” [Judge Cole] said. “The conduct of the Regents…is contrary to the concept of how charitable trusts should be handled…

Full article at

Maybe it's time for UCLA and the Regents to stop and think it over.  Wouldn't a compromise that preserves the Garden be a better outcome than expensive further litigation?  Or are we just going to march forward regardless of consequences as on the hotel project?
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UPDATE: The Los Angeles Times story on the court decision is at


Has the Worm Turned in the UCLA Lab Fire Trial?

From the LA Times: (excerpt)

Criminal proceedings against UCLA chemistry professor Patrick Harran took a bizarre turn Thursday when the defense alleged in court papers that the state's chief investigator in the accidental death of a lab worker committed murder as a teenager in 1985. The investigator, Brian Baudendistel, denied it...


Baudendistel, a senior special investigator for the California Division of Occupational Safety and Health, was instrumental in building the criminal case against Harran and UCLA with a 95-page report that blamed both in the death of 23-year-old Sheharbano "Sheri" Sangji. She suffered fatal burns when a experiment burst into flames in December 2008...


In late December, however, the Los Angeles County district attorney's office charged Harran and the UC regents with three counts each of willfully violating occupational safety and health standards. After months of plea negotiations, the defendants are due back in Superior Court on Friday to be arraigned — or to announce if any deals have been struck. In his filing, which includes a motion to quash Harran's arrest warrant, his defense attorney, Thomas O'Brien, signaled that he would seek to put Baudendistel's credibility on trial...


The defense filing states that a private investigator tracked down the information on Baudendistel's past and that it was presented it to the district attorney's office on June 1. Prosecutors at first told the defense that the Cal/OSHA investigator was not the same Baudendistel, the filing states, but later determined through a fingerprint match that he was and notified the defense lawyers of that this week...


Full story at 
http://www.latimes.com/news/local/la-me-lab-death-20120727,0,2641965.story

Note: Earlier posts related to this matter can be found at:

http://uclafacultyassociation.blogspot.com/2011/12/ucla-professor-charged-in-2008-lab-fire.html

Update: It appears that the worm only partly turned.  Below is an email sent today to UCLA faculty and staff from the chancellor on this matter:

To the Campus Community:

The tragic accident in December 2008 that took research associate Sheri Sangji’s life was a terrible day for everyone at UCLA and devastating for the Sangji family. In the wake of that tragedy, I made a pledge that UCLA would do everything in its power to become a national model for lab safety. Since then, we have worked to meet this challenge and today the Los Angeles County District Attorney has accepted our ongoing commitment to lab safety and agreed to dismiss all charges against the Regents of the University of California.

Unfortunately, this does not resolve this case. A valued and respected member of our faculty, Professor Patrick Harran, continues to face unwarranted charges in connection with the tragedy, which he is determined to fight. The decision by the District Attorney’s office to move forward with its prosecution is distressing and, even though the Regents have been released from this case, our engagement is far from over. UCLA and the Regents will continue our unwavering support for Professor Harran, a talented organic chemistry professor. We will continue to fully provide for his defense.

To honor Ms. Sangji’s memory, the Regents will establish a $500,000 scholarship in her name at the UC Berkeley School of Law – which sent her an acceptance letter shortly after the accident. We will also continue our work in lab safety, which will include establishing a lab safety program and policies for all 10 University of California campuses.

Long before these charges were ever filed, UCLA began working to enhance lab safety on our own campus and established the now nationally-recognized UC Center for Laboratory Safety. We realized it was critical that we do everything possible to prevent such a tragedy from ever happening again – and that we help spread the message of lab safety throughout labs worldwide.
As I’ve said before, great institutions are measured by how they respond in difficult times. I am proud of the accomplishments of our students, faculty and staff in improving lab safety; their work will continue. UCLA’s long tradition of excellence and high standards demands it.

Sincerely,
Gene D. Block
Chancellor
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Update: CaliforniaWatch's story on the settlement is at
http://californiawatch.org/dailyreport/criminal-case-settled-uc-regents-over-ucla-lab-fire-17314


Thursday, July 26, 2012

Japanese Garden Ruling Expected July 27

“Hannah Carter Garden Ruling Expected Today” 
(Which Means Tomorrow – July 27)  
By Laura Coleman

L.A. Superior Court Judge Lisa Hart Cole is today* expected to rule on whether to halt UCLA’s pending sale of the Hannah Carter Japanese Garden. Cole postponed judgment earlier this month on issuing a preliminary injunction opposing the sale, which was filed by the heirs of Hannah Carter on June 13, until she was able to determine whether the university is a charitable trust or a public entity. The Kyoto-style Bel Air garden, bequeathed to the university by former UC Regent Edward Carter with the stipulation that it be maintained “in perpetuity”…

*Since this is the July 27 edition, “today” means Friday, July 27.

Full article on page 4 of e-edition of the Beverly Hills Courier – July 27, 2012 - which is available at http://bhcourier.com/e-edition. (Note: If you are looking at this item at a later date, you may see a later edition of the newspaper.)

We're Number Nine! (In 4-Year Graduation Rate)

Click on image to enlarge.  From the Sacramento Bee at
http://www.sacbee.com/2012/07/16/4635070/see-which-california-colleges.html

U-CVS-LA?

Why does the item below make me nervous?  From the LA Times (excerpt):

UCLA doctors to oversee 11 CVS in-store clinics: Doctors will serve as medical directors for 11 CVS MinuteClinics in Los Angeles County through an agreement with UCLA Health System.

Pharmacy giant CVS Caremark Corp. and UCLA Health System are teaming up to treat patients in 11 in-store clinics in Los Angeles County as one remedy to a growing shortage of primary care physicians. Under this arrangement, UCLA physicians will serve as medical directors overseeing 11 CVS MinuteClinics and the two entities will share electronic medical records.

…Drugstore chains and major retailers are opening more of these walk-in clinics to capitalize on the influx of newly insured patients under the Affordable Care Act. …A study by Rand Corp., a nonprofit think tank in Santa Monica, found these clinics provide care at 30% to 40% lower cost than similar care provided at a physician's office and that the care provided for routine illnesses was of similar quality. But some physicians express concern about these clinics treating more patients with chronic and often serious illnesses such as diabetes and hypertension.


What could possibly go wrong?
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Wednesday, July 25, 2012

13 Not a Lucky Number for Lawsuit

Proposition 13 of 1978 is noted mainly for its major reduction and capping of property taxes.  As has been reported previously on this blog, former UCLA Chancellor Charles Young filed a lawsuit challenging another feature of Prop 13, the requirement for a two-thirds vote in the legislature for tax increases. News reports indicate that the premise of the suit has been twice rejected.  It is unclear if there will now be a further appeal to the California Supreme Court.

Details:  …The 2nd District Court of Appeal in Los Angeles on Tuesday denied, without comment, an appeal of a lower court decision rejecting a challenge to [Prop 13] from Charles Young, the former chancellor of the UCLA campus. Although Proposition 13 was upheld by the state Supreme Court shortly after its passage, Young contended that by requiring a two-thirds legislative vote for imposing new taxes, the measure constituited a "revision" of the state constitution that could not be enacted by voters. While voter-approved initiatives can amend the constitution, revisions -- a more fundamental form of change -- must go through a constitutional convention or a constitutional revision commission…


Overturning the two-thirds requirement would be a major change in California's post-13 fiscal arrangements.  There have been several unsuccessful legal challenges to Prop 13 since it was enacted.  The most well known (but unsuccessful) challenge, which went before the U.S. Supreme Court, was the Nordlinger case.  Background:

Update: I am told an appeal of the current case to the California Supreme Court is likely.

Tuesday, July 24, 2012

Official Description of Governor's Tax Initiative from the LAO


As readers of this blog will know, the Regents have endorsed Prop 30, the governor's tax initiative to be on the ballot Nov. 6, 2012.  Below is the official description from the Legislative Analyst's Office that will be seen by voters.

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Proposition 30

Temporary Taxes to Fund Education. Guaranteed Local Public Safety Funding. Initiative Constitutional Amendment.

Summary of Legislative Analyst’s Estimate of Net State and Local Government Fiscal Impact
  • Fiscal Impact: Increased state tax revenues through 2018-19, averaging about $6 billion annually over the next few years. Revenues available for funding state budget. In 2012-13, planned spending reductions, primarily to education programs, would not occur.
Yes/No Statement
YES vote on this measure means: The state would increase personal income taxes on high-income taxpayers for seven years and sales taxes for four years. The new tax revenues would be available to fund programs in the state budget.
NO vote on this measure means: The state would not increase personal income taxes or sales taxes. State spending reductions, primarily to education programs, would take effect in 2012-13.

Overview

This measure temporarily increases the state sales tax rate for all taxpayers and the personal income tax (PIT) rates for upper-income taxpayers. These temporary tax increases provide additional revenues to pay for programs funded in the state budget. The state’s 2012-13 budget plan—approved by the Legislature and the Governor in June 2012—assumes passage of this measure. The budget, however, also includes a backup plan that requires spending reductions (known as “trigger cuts”) in the event that voters reject this measure. This measure also places into the State Constitution certain requirements related to the recent transfer of some state program responsibilities to local governments. Figure 1 summarizes the main provisions of this proposition, which are discussed in more detail below.
Overview of Proposition 30

State Taxes and Revenues

Background

The General Fund is the state’s main operating account. In the 2010-11 fiscal year (which ran from July 1, 2010 to June 30, 2011), the General Fund’s total revenues were $93 billion. The General Fund’s three largest revenue sources are the PIT, the sales tax, and the corporate income tax.
Sales Tax. Sales tax rates in California differ by locality. Currently, the average sales tax rate is just over 8 percent. A portion of sales tax revenues goes to the state, while the rest is allocated to local governments. The state General Fund received $27 billion of sales tax revenues during the 2010-11 fiscal year.
Personal Income Tax. The PIT is a tax on wage, business, investment, and other income of individuals and families. State PIT rates range from 1 percent to 9.3 percent on the portions of a taxpayer’s income in each of several income brackets. (These are referred to as marginal tax rates.) Higher marginal tax rates are charged as income increases. The tax revenue generated from this tax—totaling $49.4 billion during the 2010-11 fiscal year—is deposited into the state’s General Fund. In addition, an extra 1 percent tax applies to annual income over $1 million (with the associated revenue dedicated to mental health services).

Proposal

Increases Sales Tax Rate From 2013 Through 2016. This measure temporarily increases the statewide sales tax rate by one-quarter cent for every dollar of goods purchased. This higher tax rate would be in effect for four years—from January 1, 2013 through the end of 2016.
Increases Personal Income Tax Rates From 2012 Through 2018. As shown in Figure 2, this measure increases the existing 9.3 percent PIT rates on higher incomes. The additional marginal tax rates would increase as taxable income increases. For joint filers, for example, an additional 1 percent marginal tax rate would be imposed on income between $500,000 and $600,000 per year, increasing the total rate to 10.3 percent. Similarly, an additional 2 percent marginal tax rate would be imposed on income between $600,000 and $1 million, and an additional 3 percent marginal tax rate would be imposed on income above $1 million, increasing the total rates on these income brackets to 11.3 percent and 12.3 percent, respectively. These new tax rates would affect about 1 percent of California PIT filers. (These taxpayers currently pay about 40 percent of state personal income taxes.) The tax rates would be in effect for seven years—starting in the 2012 tax year and ending at the conclusion of the 2018 tax year. (Because the rate increase would apply as of January 1, 2012, affected taxpayers likely would have to make larger payments in the coming months to account for the full-year effect of the rate increase.) The additional 1 percent rate for mental health services would still apply to income in excess of $1 million. Proposition 30’s rate changes, therefore, would increase these taxpayers’ marginal PIT rate from 10.3 percent to 13.3 percent. Proposition 38 on this ballot would also increase PIT rates. The nearby box describes what would happen if both measures are approved.
Current and Proposed Personal Income Tax Rates Under Proposition 30

What Happens if Voters Approve Both Proposition 30 and Proposition 38?

State Constitution Specifies What Happens if Two Measures Conflict. If provisions of two measures approved on the same statewide ballot conflict, the Constitution specifies that the provisions of the measure receiving more “yes” votes prevail. Proposition 30 and Proposition 38 on this statewide ballot both increase personal income tax (PIT) rates and, as such, could be viewed as conflicting.
Measures State That Only One Set of Tax Increases Goes Into Effect. Proposition 30 and Proposition 38 both contain sections intended to clarify which provisions are to become effective if both measures pass:
  • If Proposition 30 Receives More Yes Votes. Proposition 30 contains a section indicating that its provisions would prevail in their entirety and none of the provisions of any other measure increasing PIT rates—in this case Proposition 38—would go into effect.
  • If Proposition 38 Receives More Yes Votes. Proposition 38 contains a section indicating that its provisions would prevail and the tax rate provisions of any other measure affecting sales or PIT rates—in this case Proposition 30—would not go into effect. Under this scenario, the spending reductions known as the “trigger cuts” would take effect as a result of Proposition 30’s tax increases not going into effect.

Fiscal Effect

Additional State Revenues Through 2018-19. Over the five fiscal years in which both the sales tax and PIT increases would be in effect (2012-13 through 2016-17), the average annual state revenue gain resulting from this measure’s tax increases is estimated at around $6 billion. Smaller revenue increases are likely in 2011-12, 2017-18, and 2018-19 due to the phasing in and phasing out of the higher tax rates.
Revenues Could Change Significantly From Year to Year. The revenues raised by this measure could be subject to multibillion-dollar swings—either above or below the revenues projected above. This is because the vast majority of the additional revenue from this measure would come from the PIT rate increases on upper-income taxpayers. Most income reported by upper-income taxpayers is related in some way to their investments and businesses, rather than wages and salaries. While wages and salaries for upper-income taxpayers fluctuate to some extent, their investment income may change significantly from one year to the next depending upon the performance of the stock market, housing prices, and the economy. For example, the current mental health tax on income over $1 million generated about $730 million in 2009-10 but raised more than twice that amount in previous years. Due to these swings in the income of these taxpayers and the uncertainty of their responses to the rate increases, the revenues raised by this measure are difficult to estimate.

State Spending

Background

State General Fund Supports Many Public Programs. Revenues deposited into the General Fund support a variety of programs—including public schools, public universities, health programs, social services, and prisons. School spending is the largest part of the state budget. Earlier propositions passed by state voters require the state to provide a minimum annual amount—commonly called the Proposition 98 minimum guarantee—for schools (kindergarten through high school) and community colleges (together referred to as K-14 education). The minimum guarantee is funded through a combination of state General Fund and local property tax revenues. In many years, the calculation of the minimum guarantee is highly sensitive to changes in state General Fund revenues. In years when General Fund revenues grow by a large amount, the guarantee is likely to increase by a large amount. A large share of the state and local funding that is allocated to schools and community colleges is “unrestricted,” meaning that they may use the funds for any educational purpose.

Proposal

New Tax Revenues Available to Fund Schools and Help Balance the Budget. The revenue generated by the measure’s temporary tax increases would be included in the calculations of the Proposition 98 minimum guarantee—raising the guarantee by billions of dollars each year. A portion of the new revenues therefore would be used to support higher school funding, with the remainder helping to balance the state budget. From an accounting perspective, the new revenues would be deposited into a newly created state account called the Education Protection Account (EPA). Of the funds in the account, 89 percent would be provided to schools and 11 percent to community colleges. Schools and community colleges could use these funds for any educational purpose. The funds would be distributed the same way as existing unrestricted per-student funding, except that no school district would receive less than $200 in EPA funds per student and no community college district would receive less than $100 in EPA funds per full-time student.

Fiscal Effect if Measure Is Approved

2012-13 Budget Plan Relies on Voter Approval of This Measure. The Legislature and the Governor adopted a budget plan in June to address a substantial projected budget deficit for the 2012-13 fiscal year as well as projected budget deficits in future years. The 2012-13 budget plan (1) assumes that voters approve this measure and (2) spends the resulting revenues on various state programs. A large share of the revenues generated by this measure is spent on schools and community colleges. This helps explain the large increase in funding for schools and community colleges in 2012-13—a $6.6 billion increase (14 percent) over 2011-12. Almost all of this increase is used to pay K-14 expenses from the previous year and reduce delays in some state
K-14 payments. Given the large projected budget deficit, the budget plan also includes actions to constrain spending in some health and social services programs, decrease state employee compensation, use one-time funds, and borrow from other state accounts.
Effect on Budgets Through 2018-19. This measure’s additional tax revenues would be available to help balance the state budget through 2018-19. The additional revenues from this measure provide several billion dollars annually through 2018-19 that would be available for a wide range of purposes—including funding existing state programs, ending K-14 education payment delays, and paying other state debts. Future actions of the Legislature and the Governor would determine the use of these funds. At the same time, due to swings in the income of upper-income taxpayers, potential state revenue fluctuations under this measure could complicate state budgeting in some years. After the proposed tax increases expire, the loss of the associated tax revenues could create additional budget pressure in subsequent years.

Fiscal Effect if Measure Is Rejected

Backup Budget Plan Reduces Spending if Voters Reject This Measure. If this measure fails, the state would not receive the additional revenues generated by the proposition’s tax increases. In this situation, the 2012-13 budget plan requires that its spending be reduced by $6 billion. These trigger cuts, as currently scheduled in state law, are shown in Figure 3. Almost all the reductions are to education programs—$5.4 billion to K-14 education and $500 million to public universities. Of the K-14 reductions, roughly $3 billion is a cut in unrestricted funding. Schools and community colleges could respond to this cut in various ways, including drawing down reserves, shortening the instructional year for schools, and reducing enrollment for community colleges. The remaining $2.4 billion reduction would increase the amount of late payments to schools and community colleges back to the 2011-12 level. This could affect the cash needs of schools and community colleges late in the fiscal year, potentially resulting in greater short-term borrowing.
2012-13 Spending Reductions if Voters Reject Proposition 30
Effect on Budgets Through 2018-19. If this measure is rejected by voters, state revenues would be billions of dollars lower each year through 2018-19 than if the measure were approved. Future actions of the Legislature and the Governor would determine how to balance the state budget at this lower level of revenues. Future state budgets could be balanced through cuts to schools or other programs, new revenues, and one-time actions.

Local Government Programs

Background

In 2011, the state transferred the responsibility for administering and funding several programs to local governments (primarily counties). The transferred program responsibilities include incarcerating certain adult offenders, supervising parolees, and providing substance abuse treatment services. To pay for these new obligations, the Legislature passed a law transferring about $6 billion of state tax revenues to local governments annually. Most of these funds come from a shift of a portion of the sales tax from the state to local governments.

Proposal

This measure places into the Constitution certain provisions related to the 2011 transfer of state program responsibilities.
Guarantees Ongoing Revenues to Local Governments. This measure requires the state to continue providing the tax revenues redirected in 2011 (or equivalent funds) to local governments to pay for the transferred program responsibilities. The measure also permanently excludes the sales tax revenues redirected to local governments from the calculation of the minimum funding guarantee for schools and community colleges.
Restricts State Authority to Expand Program Requirements. Local governments would not be required to implement any future state laws that increase local costs to administer the program responsibilities transferred in 2011, unless the state provided additional money to pay for the increased costs.
Requires State to Share Some Unanticipated Program Costs. The measure requires the state to pay part of any new local costs that result from certain court actions and changes in federal statutes or regulations related to the transferred program responsibilities.
Eliminates Potential Mandate Funding Liability. Under the Constitution, the state must reimburse local governments when it imposes new responsibilities or “mandates” upon them. Under current law, the state could be required to provide local governments with additional funding (mandate reimbursements) to pay for some of the transferred program responsibilities. This measure specifies that the state would not be required to provide such mandate reimbursements.
Ends State Reimbursement of Open Meeting Act Costs. The Ralph M. Brown Act requires that all meetings of local legislative bodies be open and public. In the past, the state has reimbursed local governments for costs resulting from certain provisions of the Brown Act (such as the requirement to prepare and post agendas for public meetings). This measure specifies that the state would not be responsible for paying local agencies for the costs of following the open meeting procedures in the Brown Act.

Fiscal Effects

State Government. State costs could be higher for the transferred programs than they otherwise would have been because this measure (1) guarantees that the state will continue providing funds to local governments to pay for them, (2) requires the state to share part of the costs associated with future federal law changes and court cases, and (3) authorizes local governments to refuse to implement new state laws and regulations that increase their costs unless the state provides additional funds. These potential costs would be offset in part by the measure’s provisions eliminating any potential state mandate liability from the 2011 program transfer and Brown Act procedures. The net fiscal effect of these provisions is not possible to determine and would depend on future actions by elected officials and the courts.
Local Government. The factors discussed above would have the opposite fiscal effect on local governments. That is, local government revenues could be higher than they otherwise would have been because the state would be required to (1) continue providing funds to local governments to pay for the program responsibilities transferred in 2011 and (2) pay all or part of the costs associated with future federal and state law changes and court cases. These increased local revenues would be offset in part by the measure’s provisions eliminating local government authority to receive mandate reimbursements for the 2011 program shift and Brown Act procedures. The net fiscal effect of these provisions is not possible to determine and would depend on future actions by elected officials and the courts.

Summary

If voters approve this measure, the state sales tax rate would increase for four years and PIT rates would increase for seven years, generating an estimated $6 billion annually in additional state revenues, on average, between 2012-13 and 2016-17. (Smaller revenue increases are likely for the 2011-12, 2017-18, and 2018-19 fiscal years.) These revenues would be used to help fund the state’s 2012-13 budget plan and would be available to help balance the budget over the next seven years. The measure also would guarantee that local governments continue to annually receive the share of state tax revenues transferred in 2011 to pay for the shift of some state program responsibilities to local governments.
If voters reject this measure, state sales tax and PIT rates would not increase. Because funds from these tax increases would not be available to help fund the state’s 2012-13 budget plan, state spending in 2012-13 would be reduced by about $6 billion, with almost all the reductions related to education. In future years, state revenues would be billions of dollars lower than if the measure were approved.

A pdf version of the text above is available at
http://www.lao.ca.gov/ballot/2012/30_11_2012.pdf



UPDATE: More info on the proposition:


Proposition 30