Friday, March 16, 2012

Schools and Taxes - Welcome to Mississippi

            California public schools are in crisis- and they are getting worse. This is a direct result of massive budget cuts imposed by the legislature and the governor in the last four years.  Total per pupil expenditure is down by over $1,000 per student. The result- massive class size increases.  Your students are in often classes too large for learning.  Supplementary services such as tutoring and art classes have been eliminated.  Over 14,000 teachers have been dismissed, and thousands more face lay offs this fall.
            California schools are now 47th. in the nation in per pupil expenditure and 49th in class size.  Our low achievement scores on national tests reflect this severe underfunding.
            Of course the economic crisis of 2007 to the present made matters worse.  The state took in some $30 billion less in taxes and thus had less to send to the schools.  School budgets have been cut by some $10 billion.  K-12 education receives about 40% of the California budget.  Thus any decline in the state budget leads directly to cuts in school services.
            The question for the corporate agenda, such as the Chamber of Commerce is can the economy prosper with a poorly educated work force.  California grew and prospered from 1970- 1994 based upon a well educated work force.  Then, in the 1994-2008 period over $10 billion of tax cuts were passed – making the current crisis much worse.  California suffers from a decade of disinvestment.  Today,  instead of following the education  approach,  conservative anti tax forces have imposed an Mississippi approach on California.

            Now we are faced with a choice.  Shall we raise taxes and fund the schools, or shall we continue the current practice of cut, cut, cut.  In the fall election we will be faced with at least three choices.  Continue as is, or choose between two tax proposals.  If the anti tax forces have their way and we do not pass new taxes the effects on the schools will be devastating – as will be effects on health clinics and local services.
            One proposal will be the new combination of the Governor’s tax proposal as merged with the Millionaires tax proposal.  This merger is a modest proposal.  Sales tax would go up ¼ cent ( as opposed to the ½ cent originally proposed by the governor) and the taxes of the very well off would be increased.  In the Millionaires tax this increase would have been starting at one million per year, in the merged proposal there would be higher taxes in steps for persons receiving $250,000 for singles and $500,000 for couples.  Thus, it is no longer a millionaires tax, it is an increase for the well off.   By the way, some 93% of all the recent wealth generated in the economy has gone to this top 4% of  the wealthy.  They are doing just fine.
            There are other aspects of this merged proposal that will be described and developed in future posts.
            The merged proposal – it doesn’t yet have a name- would not restore the schools to their 1980’s level of funding.  It would only reduce the bleeding.  Things would not get worse next year.  California would still rank 47th. out of the 50 states in per pupil spending.
            Sacramento Bee columnist Dan Walters, a frequent voice of the anti tax crowd, calls this a “soak the rich” proposal.  That is a slogan to mobilize the right wing.  It is not an analysis.   I am confident that serious analysis will follow.  The Bee editorial board complains that this form of taxation will not end the volatility of tax collections – an accurate criticism.  However, you can’t ask that emergency measures achieve all of your goals.  The volatility issue is real and needs to be addressed in the tax code.  For example, we could re-establish the vehicle license fee, or we could re-evaluate commercial property regularly for property taxes.  Both would reduce the volatility of tax receipts.  A subsequent post will respond to their pension arguments.
            There are some weaknesses in the governor’s proposal.   For now, the problem is to qualify this new initiative.  This will require over 800,000 valid voter signatures and a fall campaign.    

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