California Ballot Measures Part One: Proposition 30

“No government ever voluntarily reduces itself in size.  Government programs, once launched, never disappear.  Actually, a government bureau is the nearest thing to eternal life we’ll ever see on this earth!”  ~Ronald Reagan

By Alden L. Benton

Tuesday’s election is more than a referendum on the failed policies of Barack Obama.  Across the United States, voters will elect all 435 members of the House of Representatives and one-third of the Senate. 

In the states, voters will fill many positions in state legislatures and local government agencies. 

In addition, many states also have important measures on the ballot that will directly affect voters, perhaps for years to come.  California, my home state, is one of those states.

California voters enjoy the ability to place measures on the ballot and to remove state officials from office.  This is initiative and referendum.  This year, California voters have placed 11 measures on the ballot.

During campaigns, I have one simple rule: Campaign advertising lies.  With that in mind, in this and subsequent posts, I will attempt to provide an independent, though admittedly conservative, perspective and recommendations on these measures.

California is functionally bankrupt. 

California, thanks to the state’s smoke-and-mirrors accounting, faces, according to the Los Angeles Times, a “…budget shortfall for the rest of this fiscal year and next, estimated to be $28 billion.”

The Times article continues, saying the expected “shortfall” “is the size of the total general fund budget of 12 states combined: Delaware, Idaho, Maine, Montana, Nebraska, Nevada, New Hampshire, North Dakota, Rhode Island, South Dakota, Vermont and West Virginia.”

The state legislature, controlled by the Democratic Party for at least the last 60 years, continues to view the state’s financial chaos as an issue of insufficient revenues.  This notion is fueled by the incessant demands of the state’s public employee unions for more and more, whether it is more pay, benefits, or better working conditions — demands the legislature has been more than happy to oblige.

This time, it is the teachers’ unions demanding more from the taxpayer.  The teacher’s unions will not be satisfied until there is one student per teacher in the state’s tax-supported schools. 

According to the California Department of Education, in itself a bloated, non-essential bureaucracy that dictates to local schools, the mid-range teacher salary at an elementary school averages $62,047 — for nine months of work. 

For elementary principals, the midrange average is $104,580, again, for nine months of work.  For high school teachers, the average midrange pay is $63, 152, and for principals, $106,458. 

The overall average pay for California teachers is, according to the California Department of Education, $67,871, the fourth highest paid in the nation behind New York ($72,708), Massachusetts ($70,752), and Connecticut ($69,165). 

The teachers’ unions are playing two cards with Proposition 30: class warfare and “it’s for the children.”

Proposition 30 is not for the children, it is for the teachers’ unions. 

In California, schools spend an average of 42.81 per cent of their revenues on salaries and administrative costs.  This is a direct result of the high salaries listed above and outrageous benefit/retirement packages. 

Proposition 30 will “temporarily” increase state sales taxes 0.25 per cent for four years and earmarks funds for schools and local government.

Sales taxes are the most regressive taxes and affect lower income people disproportionately.  The more you earn, the less you pay as a percentage of your annual income.  That is class warfare at its worst.

According to a Tax Foundation report, California, despite a one percent reduction in its sales tax rate that took effect July 1, 2011, still has the highest state-level rate at 7.25 percent.  This rate includes a mandatory one per cent add-on tax which is collected by the state but distributed to local governments.

California also allows local governments to charge sales taxes up to an additional 2.5 per cent.  As of June 2012, the average local government sales tax in California is 0.88 per cent, bringing the average combined state sales tax rate to 8.13 per cent. 

In Los Angeles County, the state’s most populous county (population 9,818,605), the sales tax rate is 8.75 per cent and in the smallest, Alpine County (population 1,175), the rate is 7.25 per cent.

Proposition 30 will raise the state sales tax rate from 7.25 per cent to 7.5 per cent, generating an additional $6 billion in revenue.  In Los Angeles County, the rate will increase to 9.0 per cent.

Proposition 30 also wages Obama/Occupy-like class warfare.  As I said above, sales taxes affect the poor more than the wealthy.  To try hide this, Proposition 30 also increases the personal income tax rate on higher income earners.

According to the Tax Institute, California’s current maximum tax rate of 9.3 per cent ranks third among the states and the District of Columbia.  Only Hawaii and Oregon have a higher maximum rate of 11 per cent.

Proposition 30 will “temporarily” increase the top tax rate to from one to three per cent, depending on earnings and filing status, for seven years.  The new maximum state income tax will be 12.3 per cent — the highest in the nation. 

These new rates will affect taxpayers earning as little as $250,000.  This has the most impact on small business owners who do not pay corporate income taxes, but pay personal income tax.

With an economy in decline due to continuing mismanagement, reckless spending, and over-regulation, raising taxes is bad enough.  However, Proposition 30 makes things worse as the increases are retroactive.  Income earned in 2012 is taxed at the new rates.

There is one final, and perhaps fatal, flaw in Proposition 30. 

Even if you want to engage in class warfare and support the rape of the once golden state by public employee unions, Proposition 30 has a nasty surprise — the funds are deposited in the state’s general fund and, with a few exceptions, can be spent any way the legislature sees fit.

If you want to give more money to teachers who already earn 31 per cent more than the average Californian, then vote for Proposition 30.  

If you want to give more money to an educational system that consumes 51 per cent of the state’s revenue (California Department of Finance) and produces the worst results in the nation (California Watch), then vote for this measure.

Sales and Income taxes already provide more than 84 per cent of California’s revenue.  (2012-13 California Budget

California does not have a revenue problem.  It has a spending problem and in education, a quality problem.

If you are tired of government as usual in California, vote no on Proposition 30 and demand true reform of an obviously broken system.


“The problem is not that people are taxed too little, the problem is that government spends too much.”  ~Ronald Reagan

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©2012 Alden L. Benton/Independence Creek Enterprises
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