Why the Green Party Opposes Proposition 38

First, Prop 38 increases income taxes on the middle class in order to fund education. This perpetuates the idea that “shared sacrifice” is needed to resolve our schools’ budget problems, rather than more progressive taxation on the highest income levels, which is what Prop 30 does (albeit not as strongly as the Green Party would prefer).

 

Incredibly, Prop 38 starts increasing income tax at $7,000/year (even though personal, dependent, senior, and other tax credits, among other factors, would continue to eliminate all tax liabilities for many lower-income tax filers), whereas under Prop 30, only the top five percent of income earners pay increases. Under Prop 38, the top tax rate is only 2%, compared to 3% under Prop 30.

 

Second, since both Prop 30 and Prop 38 would amend the state's personal income tax (PIT) rate , the two are viewed as competing.  Under state law, if both of them pass, the one with more votes would take precedence.  According to the state's Legislative Analyst, if both of them pass and Proposition 38 receives more 'yes' votes than Prop 30, then Prop 38's more regressive PIT go into effect over Prop 30's more progressive PIT.

 

Third, the Green Party generally does not support 'ballot-box budgeting', which is where revenue streams are restricted to fund only specific programs. Instead the Green Party generally believes its better for revenues to go into the general fund where the legislature is able to consider the entire budget as a whole, and then allow the voters to change elected officials when they don't approve of those priorities.

 

Because Prop 38 would dedicate all of its increased revenue to K-12 and early childhood education, it would de facto leave other areas vulnerable to more draconian cuts. Unlike Prop 30, funding from Prop 38 cannot even be used to supplant current budgets cuts and deferrals. It is purely for additional programs and trainings.

 

All of this would be further exacerbated by Prop 38's competition with Prop 30.

 

According to the state's Legislative Analyst, if both pass and Proposition 38 receives more 'yes' votes than Prop 30, then the $6 billion of automatic spending reductions known as the “trigger cuts” would take effect as a result of Proposition 30’s tax increases not going into effect. This is because when the state's FY2012-2013 budget was passed, it was made conditional upon Prop 30 going into effect. While Prop 38's funding for education would address the trigger cuts in education, they would not address the trigger cuts in other social services.

 

Fourth, the Green Party believes that comprehensive tax reform is needed to address the state's structural deficit.  But whereas Prop 30's more progressive tax increases would be in effect through FY2018-2019, Prop 38's more regressive tax increases would be in effect through FY 2023-2024.  By relieving some of the pressure to fund education for a longer period of time, the Green Party believes this will lessen the incentive to make comprehensive structural change, possibly postponing or undermining needed systematic tax reform for an additional decade or more, and leaving our state in an overall, unnecessary financial abyss.

 

Many Green Party members have a concern about recommending a 'no' vote on Prop 38, lest it play into the idea that California can get needed services without paying for them. But that is another reason to support Prop 30.

 

Neither Prop 30 nor Prop 38 offer the kind of comprehensive change the state needs. Given that these are our only choices this year and that draconian trigger cuts go into effect if Prop 30 does not pass,  the Green Party opposes Prop 38 and endorses Prop 30 as the best short-term approach to a long-term crisis.

 

In the long term, Greens believe in comprehensive tax reform including a progressive income tax; natural resources extraction taxes such as an oil severance tax; pollution taxes like a carbon tax; closing corporates loopholes and eliminating corporate welfare; addressing the problem in Prop 13 that commercial land is not being taxed via enacting a split roll, and more comprehensively enacting a land value tax where the socially-created value of land is retained by society; and legalizing, taxing and regulating marijuana - all while cutting income taxes for the average worker and payroll taxes for small businesses, so that we reward work and a healthy environment, penalize pollution and waste, and keep the unearned profit out of speculation and monopolies.