Friday, July 13, 2012

Tax Initiative War Shaping Up Could Hurt UC

There are three tax measures on the November ballot.  Prop 30 – the governor’s tax initiative – is a temporary increase in income taxes and sales taxes.  If it doesn’t pass, there will be trigger cuts including a $250 million cut to UC.  See prior blog posts for info including the Regents’ likely endorsement of Prop 30.  The tax proposition most in competition with Prop 30 is Prop 38 sponsored by Molly Munger.  Earlier in the game, the governor tried to make a deal with Munger so that her initiative would not appear.  That attempt failed.  Now it is being reported that supporters of the governor’s initiative have formed a committee to sponsor attacks on Prop 38. 

It’s not clear that this approach won’t be harmful to the governor’s initiative.  Voters may have trouble distinguishing the two initiatives or might vote against both, based on the negativity (especially if the anti-38 campaign leads to a counter anti-30 campaign).  Excerpt from the Sacramento Bee:

The likelihood of open warfare between Gov. Jerry Brown and civil rights attorney Molly Munger, who have rival tax increase measures on the November ballot, has increased with the formation by Brown's supporters of a committee to oppose Munger. Stop the Middle-Class Income Tax Hike--No on Prop. 38 has filed a statement of organization with the secretary of state's office, with political consultant Jason Kinney as treasurer and Dr. James Hay, president of the California Medical Association, as its "principal officer." The CMA supports Brown's Proposition 30…  Proposition 30 would raise sales taxes slightly but would derive most of its revenue from hefty increases in income taxes on taxpayers with taxable incomes of $250,000 or more. Although billed as a measure to support schools, its proceeds would generally close a chronic deficit in the state budget. Munger's measure, which is backed by the PTA, would raise income taxes on all but the lowest income taxpayers and its proceeds would boost school spending…

Seems like a potentially bad idea:

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