The Explainer: Propositions 30 and 38
The Explainer: Propositions 30 and 38
Updated at 1:25 p.m. Monday, October 22
The November ballot contains two state measures that would raise taxes to help pay public school costs, Proposition 30 and Proposition 38. Here’s an explanation of what each measure would do if passed.
Proposition 30 would raise money to help cover an array of state and local services by increasing sales taxes by a quarter percent and raising income taxes on Californians earning $250,000 or more for seven years. The money raised by the tax increases – estimated at an average of $6 billion a year, according to a nonpartisan analysis conducted by Mary Perry for the Silicon Valley Education Foundation – would be deposited into the state’s general fund, 40 percent or more of which can be budgeted to pay for schools each year.
The measure, which was placed on the ballot by Governor Jerry Brown and is being promoted by the California Teachers Association, also would permanently shift $6 billion a year out of the general fund into a special fund to cover the costs of a 2011 realignment plan that puts new convicts into county lockups instead of state prisons.
State lawmakers have already included the money Proposition 30 would raise if approved by voters in this year’s budget; the state Department of Finance has estimated the measure will raise $2.9 billion to cover K-12 school and community college costs this year – at least $100 per full-time equivalent community college student and $200 per K-12 student. But if voters reject the measure, the state will make $6 billion in “trigger cuts” to this year’s budget – including $5.4 billion in cuts to schools – an average of $457 per K-12 student.
While California’s existing Proposition 98 mandates that a certain percentage of the state’s general fund be spent on schools, it does not prohibit lawmakers from moving things in and out of the general fund in order to manipulate that amount. If Proposition 30 fails, Brown has said he would put $2.5 billion in bond costs now covered by other state funds into the general fund – reducing the amount of funding available for schools.
According to the Silicon Valley Education Foundation’s analysis, without additional funds, the realignment shift would reduce the Proposition 98 funding “guarantee” by $2 billion. There is nothing in Proposition 30 that prevents state lawmakers from shifting additional money out of the general fund, it says.
Staffers with the California Teachers Association say Proposition 30’s failure would also further slow $10 billion in prior-year payments that the state owes public schools, though the foundation’s analysis says that decision is part of the budget process, and not addressed by either initiative. CTA’s reps are also saying the Legislature could go back to last year’s budget and rerun the numbers used to calculate school funding based on lower funding – a process known as “rebenching” – taking back about $100 per student the state already allotted but may not yet have paid.
For Alameda Unified, the loss of Proposition 30 and enactment of the trigger cuts would mean a loss of $438 this year for each of the roughly 9,000 students the district serves, a CTA representative said; the district's chief business officer, Robert Shemwell, said the measure's failure would cost Alameda Unified $3.5 million this year, and would cause $6.5 million in cuts over the next three years.
Alameda Unified’s administrators said in September they were still waiting for the state to pay $20 million it owes on the 2011-2012 school year; Shemwell said Friday that the district is generally functioning in 60 cents of every dollar the state owes but that the amount changes from month to month. Their three-year budget projections factor in a $457 per student cut if neither ballot measure passes; the projections show the district’s unrestricted fund would be running a deficit by next year if local voters had not approved the Measure A parcel tax.
District administrators are tentatively slated to discuss the impacts of the ballot measures on November 27.
Conversely, Proposition 38 would create a new and separate funding source for K-12 schools and early childhood education programs by raising income taxes for almost every Californian for 12 years. The measure would raise an estimated $10 billion a year in its early years with increases over time, according to the Silicon Valley Education Foundation’s analysis.
If passed, the proposition would set up three new block grant programs for K-12 schools: One to cover basic education costs, a second to address the additional needs of low-income students and a third to spend on training and technology. Money raised by the additional taxes also would fund early childhood education programs and help pay down state bond debt.
Under Proposition 38, which was placed on the ballot by civil rights attorney Molly Munger and is backed by the California State Parent Teacher Association, school districts would be required to set up a process for gathering public input about how it would be spent and to explain how the expenditures are expected to improve student outcomes. District leaders would be required to pass the money directly to school sites, and to create detailed budgets for each school – something Alameda Unified began doing under Superintendent Kirsten Vital.
Districts that don’t follow the allocation and distribution provisions of the measure could face felony charges, PTA Council President Tom Lynch said, and elected schools leaders could be barred from political office. Representatives for the Proposition 38 campaign did not respond to e-mails seeking further clarification on those provisions.
Proposition 30’s backers have said the state’s “trigger cuts” would go into effect even if Proposition 38 passes, and the latter measure’s new taxes don’t go into effect until 2013, a year after the cuts are made. But backers of Proposition 38 say the money that measure would generate can be used to cover an array of school-site needs, though the measure explicitly bars school districts from spending it on salary or benefit increases.
State Superintendent of Public Instruction Tom Torlakson told the Sacramento Bee in September that he thinks lawmakers would revisit the cuts if Proposition 38 prevailed over Brown’s measure.
“If there is a pot of money generated outside of the budget deal, it still addresses priorities the governor and Legislature said they care about. So I think the Legislature would find a way to bridge the budget gap knowing the money is coming in,” Torlakson told the Bee.
Proposition 38's passage could provide about $8.2 million to the district in 2013-2014 and more in future years, Shemwell said, but he said the district has not budgeted for the money since it is not included in the state's budget.
A new analysis from a consultant working for the Proposition 30 campaign shows that the state’s K-12 schools would lose $6.3 billion over the next six years if Proposition 30 failed and Proposition 38 passed, chiefly due to the fact that under the latter measure the taxes wouldn’t be collected until 2013. But the Silicon Valley Education Foundation’s analysis said that under Proposition 38, K-12 schools would receive $4 billion more in 2015-2016 under Proposition 38 than they would if Proposition 30 prevailed.
A separate analysis from the Legislative Analyst’s Office notes that Proposition 30’s primary revenues source – additional income taxes on the wealthy – can fluctuate from year to year, which could impact the amount of money the measure generates.
If voters were to approve both measures, the one with the most votes would be enacted; both need a majority vote to pass. A late September USC Dornslife/Los Angeles Times poll showed that 54 percent of voters supported Proposition 30, while 34 percent said they’d vote for Proposition 38.
Backers of both measures and the drafters of analyses of the tax measures have said that California’s schools, which have seen an $8 billion reduction in the Proposition 98 funding guarantee since 2007-2008, will see further cuts if both measures fail; some groups have urged a "yes" vote on both. (The Republican Party opposes both measures, and the state Chamber of Commerce and Democratic Party oppose Proposition 38; the Howard Jarvis Taxpayers Association has launched a campaign against Proposition 30, calling it a "flawed initiative" that doesn't include school funding reform.)
“For those who believe that California’s K-12 schools must be protected from further cuts, the worst case scenario is that both of these measures fail,” Perry wrote. “Absent some other dramatic increase in state revenues through legislative action – which at this point seems politically unfeasible – further education cuts appear to be inevitable.”
Additional information on Proposition 30 and Proposition 38, including side-by-side comparisons of their provisions, can be accessed by clicking the links in and below this story.