Friday, December 16, 2011

Contra Costa Times: State group pushing millionaire tax initiative continues

California group behind millionaires tax presses on
By Steven Harmon Bay Area News Group
© Copyright 2011, Bay Area News Group Posted: 12/15/2011 04:05:58 PM PST

SACRAMENTO -- A group touting a populist tax on millionaires is not backing down from Gov. Jerry Brown's pleas to clear the field for his own tax initiative.

Organizers for the liberal Restoring California boasted Thursday that their tax measure has the best chance of winning among the four submitted to the attorney general. The group says an internal poll shows 67 percent of likely voters are in favor of a tax on those with an annual income of $1 million or more.

"Our proposal draws a sharp line in the sand politically," said Joshua Pechthalt, president of the California Teachers Federation, one of dozens of groups backing the tax measure.

"We're not trying to poke a finger in anybody's eye, but if you're true to your values about who's been benefiting and not and who should pay their fair share, you have to decide that there is a group of folks who can afford to take on a greater responsibility."

The tax rate would rise by 3 percentage points on individuals' income over $1 million and 5 percent on income above $2 million, on top of the 10.3 percent rate they pay today.

The proposal would raise $6 billion, which would be placed in trust funds to restore spending cuts to schools, universities, children's and senior services, public safety, and road and bridge repair.

Brown joined the crowded tax-initiative field two weeks ago with a proposed constitutional measure that would raise income taxes on individuals who make $250,000 or more and would hike the sales tax by a half-cent. The proposal would direct $7 billion to schools, freeing up extra revenues in the general fund.

The governor worried aloud this week that if more than one tax measure is on the ballot, voters are liable to turn both or all of them down. In a recent survey by the Public Policy Institute of California, 60 percent of likely voters supported Brown's plan.

"We hope we'll have a very clear field to run on in November," Brown said. "We're not there yet. If it creates chaos and confusion, that could be difficult."

Brown's proposal would cut a $13 billion spending gap roughly in half. But he intends to tie to the proposal a "trigger" for $7 billion in automatic cuts in the budget for the next fiscal year if the governor's measure fails.
Brown conceded that the only tax hike that's overwhelmingly popular is a tax on the wealthy but said he included a sales tax "because I thought we ought to have a balanced program."

Pechthalt said the governor is probably trying to "navigate what he considers to be a political minefield by creating a package that doesn't totally alienate people at the top end."

Members of his coalition, however, were "very clear we did not want to put an added burden on the backs of average folks," Pechthalt said.

Leaders of Restoring California hope to meet with the governor next week to make the case that their measure is "right for the moment we're in," Pechthalt said. "We don't feel like we have to back away from engaging in this debate."

The window for coalescing around a single initiative is closing fast because of looming deadlines.

All petition signatures for November 2012 measures are due by mid-April, and because the attorney general's office takes from 30 to 45 days to write a ballot title and summary, there would be little chance to file a new measure -- even if the groups could agree on a hybrid.

That means the competing groups would have to decide by late January, when the attorney general's office returns their titles and summaries, whether to fall behind a single measure or not.

Ben Tulchin, the Democratic consultant who surveyed 5,000 likely voters and conducted 16 rounds of focus groups on the millionaires tax, said he doesn't necessarily buy into the premise that a bevy of tax measures would lead to the defeat of them all.

"We prefer that everyone coalesce behind one, and we prefer ours, and having one on the ballot is easier than more than one," he said. "Nevertheless, there are options."

Pro-tax voters could split their votes on various proposals, while others could just throw their hands up at the plethora of measures, said Jon Coupal, president of the anti-tax Howard Jarvis Taxpayers Association.

"From a political perspective, this could inure to the benefit of fiscal conservatives like us," Coupal said. "I wouldn't say I'm cheering them on, but if they fail to present a united front, it could benefit us."

An array of tax initiatives
The Schools and Local Public Safety Protection Act of 2012, by Gov. Jerry Brown, which would raise income taxes by 1 percentage point on individuals making $250,000 a year, 1.5 percentage points on individuals making $300,000, and 2 percentage points on individuals making $500,000 and above. It also would raise the sales tax by half a percentage point. Total: $7 billion for schools.
The Millionaires Tax to Restore Funding for Education and Essential Services Act of 2012, by Restoring California, a group of teachers, unions and community organizations. It would increase the tax rate by 3 percentage points on individuals' income over $1 million and 5 percent on income above $2 million on top of the 10.3 percent rate they pay today. Total: $6 billion for schools and social services.
Our Children, Our Future: Local Schools and Early Education Investment Act, by civil rights attorney and investor Molly Munger. It would raise income taxes across the board, with the wealthy paying progressively more. Total: $10 billion to go directly to K-12 schools.
The Higher Education, Schools, Public Safety and Health Care Preservation Act, by state Democratic Party Chairman John Burton. It would levy an extraction tax on oil companies. Total: $1 billion, one-third going to higher education, the rest to the general fund.
Another proposal that has yet to be filed, being advanced by the Think Long Committee, led by billionaire Nicolas Berggruen, would raise $10 billion with a broadening of the sales taxes to services such as car repair and haircuts. The measure also would lower taxes on the wealthy and corporations and dedicate half its revenues to schools.

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