Critical Tax Measure Too Close To Call

Jerry-BrownA new survey conducted jointly by The Institute of Governmental Studies (IGS) at UC Berkeley and The Field Poll finds the initiative backed by Governor Jerry Brown, Proposition 30, continuing to lead but with support marginally lower than in early July and the undecided proportion increasing.

While much of the focus locally will be on the school parcel tax, Measure E, and the School Board races, one of the most critical election battles outside of Yolo County that will affect us locally is Proposition 30, the Governor’s Tax.

In short, everything hinges on the Governor’s Tax.  If it fails, the trigger cuts will trigger another round of fee hikes for UC Davis Students and cuts to public education.

Currently, 51% of likely voters are intending to vote Yes, 36% are voting No and 13% are undecided.  But supporters of the measure are increasingly concerned by the narrow lead before the expected massive media onslaught has really begun.

According to the release: “Proposition 30 receives its greatest support from Democrats, independents, voters under age 50, Latino, African-American and Asian-American voters, those living in the San Francisco Bay Area, and voters who have completed post-graduate work.”

It is opposed by Republicans greater than two to one, and by pluralities of Central Valley voters, those with no more than a high school education, and seniors age 65 or older.

There are competing tax measures, with the Governor’s Tax competing with Molly Munger’s tax initiative, also known as “the Millionaire’s Tax.”

The poll notes, “Many political campaign observers believe that the presence of two competing personal income tax measures whose proceeds are mostly intended to benefit the public schools could work to the detriment of both initiatives, as some voters vote Yes on Prop. 30 and No on Prop. 38, and others vote Yes on Prop. 38 and No on Prop. 30.”

This poll does not find this to be the case.  While Prop 30 is doing considerably better, and Prop 38 has not crossed the 50 percent threshold in any single poll, the impact of the two seems small.

The pollsters argue, “The poll shows that most voters – about two in three — are currently intending to vote the same way on both initiatives. Currently 35% are voting Yes on both Props. 30 and 38, while nearly as many (30%) are voting No on each. These findings are similar to those found in a late May Field Poll.”

They add: “Prop. 30’s higher standing in the polls vis-à-vis Prop. 38 is derived from a relatively small segment of voters – 17% – who currently favor Prop. 30, but are opposed or undecided on Prop. 38. By contrast, just 7% of voters currently support Prop. 38, but are opposed or undecided on Prop. 30.”

The yes number and the undecided numbers are the ones to watch.  Propositions that fail to poll at 50% tend to fail and this one is trending toward the fifty percent mark.

The director of the Field Poll, Mark DiCamillo, said that the tax measure was “ominously close to 50,” and argued that the shift in people from the yes category to the undecided category indicators that voters are beginning to weigh the merits of the tax measure.

“I think people are starting to hear campaign claims and they’re getting the fact that there are two different things,” he said. “If I’m for the schools, which one do I go with? I think that’s really what’s happening.”

At this point, however, the campaigns really have not begun, and thus Mr. DiCamillo believes that the poll results are still an early measure of voters’ attitudes.

“Once voters get the actual ballot pamphlets from the registrar of voters … that’s really when the rubber is meeting the road. We’re still not there yet,” he said.

The good news is that the poll seems to indicate that a relatively large percentage of voters think they pay about the right amount in state taxes.

Professor Jack Citrin, who directs IGS at UC Berkeley, told reporters that he believes this bodes well for Governor Brown’s measure.

“If there were really a strong sentiment there saying ‘I’m paying way too much in taxes now,’ I think that would be a bad sign,” Professor Citrin said. “There doesn’t seem to be that kind of really heavy resentment of the level of taxes being paid.”

Meanwhile, the poll remains of critical importance to the community of Davis.  If it fails, roughly $5.4 billion in additional cuts will befall schools and community colleges.

Measure E has a contingency clause in it, which would add an addition $220 to the renewal of Measure A should the governor’s tax measure fail.  If it passes, however, that would only impact 2013-14 and not the second half of 2012-13.  This means, if the governor’s tax measure fails, regardless of the Measure E results, the district has to make tremendous cuts.

The school district is busy attempting to create a contingency plan should the governor’s tax measure fail.  There is a possibility of labor strife and impasse with the teacher’s association, as the district is looking to possibly cut the school year by ten days in order to cover at least some of the expected fiscal hit.

—David M. Greenwald reporting

About The Author

David Greenwald is the founder, editor, and executive director of the Davis Vanguard. He founded the Vanguard in 2006. David Greenwald moved to Davis in 1996 to attend Graduate School at UC Davis in Political Science. He lives in South Davis with his wife Cecilia Escamilla Greenwald and three children.

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  1. hpierce

    David… have not seen the text of the local tax measure… is the District REQUIRED to limit the levy if 30 passes, or is that just their stated intent? Could they, by majority vote levy the “max tax”?

  2. rusty49

    Keep raising taxes, it’s working so well for California.

    Excerpt from IBD:

    “In 2011, more businesses (254) quit California than the year before (202), which was a high-water mark over 2009 (51). Last year, roughly five businesses left in any given week, one more than left in each week of 2010 when the average was 3.9.

    At one time, California was truly the land of opportunity. But the business climate has turned hostile.

    According to Jon Coupal, president of the Howard Jarvis Taxpayers Association, and John Kabateck, executive director of the National Federation of Independent Businesses, the state’s business tax climate is the second worst in the nation. The corporate income tax rate is 8.84%, the highest west of the Mississippi and eighth highest in the country.

    California’s income tax, which is the tax many small-business owners pay, is the nation’s third highest; the 9.3% rate kicks in at $46,349 in annual income for those who file as individuals, and the 10.3% rate applies to income over $1 million a year.

    Then there’s the highest sales tax (7.25%, plus local levies in some areas) in the country, the fourth-highest capital gains tax (9.3%) and the second-highest gasoline tax (an average of 65 cents a gallon).

    There’s also the vicious regulatory environment that businesses have to negotiate.

    “California’s anti-business climate is worse than ever because many politicians are making a career out of treating businesses as an object of scorn vs. a resource to be appreciated,” says Joe Vranich, an Orange County relocation expert who tracks business movement out of the state and provided the exit numbers cited above.

    “Hence, we see efforts to increase taxes, regulations, fines and fees on businesses.”

    The benefit of leaving California is immense. Vranich says businesses save 20% to 40% a year in costs after their out-of-state moves are completed.”

  3. David M. Greenwald

    The problem with these kinds of analyses is that it conflates impact of economy with impact of tax policies – the fact that California has not raised taxes recently but business departures (assuming your study’s figures are accurate) are peaking suggests the problem is not tax policy but economy.

  4. Frankly

    [i]The problem with these kinds of analyses is that it conflates impact of economy with impact of tax policies – the fact that California has not raised taxes recently but business departures (assuming your study’s figures are accurate) are peaking suggests the problem is not tax policy but economy[/i]

    Everything is relative David.

    Other states and countries are not standing still. They are certainly not raising taxes as this time. They are romancing away business from California.

    Think about it this way, the reasonably attractive guy next door is romancing a guy’s wife with offers of a bigger house and money for vacations while the husband is growing more abusive every day… and threatening to beat her.

    Californians are full of shit if they think they are just so cool that they can continue increasing their abuse of business and business will still stick around to accept it.

  5. Frankly

    One a different note… Brown just signed a law preventing trial lawyers from extorting money from small businesses over immaterial ADA compliance issues.

    It was a move I completely support.

    But I am so cynical at this point that I have absolutely no doubt that it was a tactical political move to help make the state Dems seem more business friendly just in time for Prop 30. Otherwise, why didn’t they tackle this legislation years ago as the abusive practices have already closed down hundreds of small businesses, and caused many hundreds more to have to write big checks to these lawyers threatening to sue?

  6. Rifkin

    An interesting question for California — one which will affect the final tally on Prop 30 and other props, but maybe not by enough to change a yes to a no or vice versa — is how much enthusiasm each side has in the presidential race.

    If it looks like Obama is going to crush Romney in California (as it does now), will that discourage Republicans from bothering to vote? Or will that cause marginal Democrats to think they already have it in the bag here and thus they don’t need to show up?

    It seems likely to me that an uncompetitive contest for president in California will depress the votes here, but maybe that will be roughly equal on both sides and thus lower turnout will be immaterial.

    I would likewise expect that in the 10 or so states where the polls are still close and where Romney and Obama are campaigning the turnout will be high.

    One last note on the polls: If you tend to disregard various polls (that is, you assume bias or inaccuracy), you might want to pay attention to the betting odds at various gambling sites around the world. The consensus view of gamblers seems to put Obama at about 3 in 4 to win; Romney at 1 in 4 ([url][/url]). With tens of thousands of gamblers, the odds do not lie. These folks are risking their money based on these odds.

  7. Frankly

    Don, I did not know that. Feinstein in a re-election year. There I am being cynical again.

    I have to say though, Dianne Feinstein reminds me of one those old Kennedy Democrats that I can easily tolerate… and even consider voting for depending on the left-leaning strength of the Democrat Party and the weakness of the Republican contender. However, I would vote for a block of wood to replace Barbara Boxer if given the chance.

  8. Frankly

    [i]With tens of thousands of gamblers, the odds do not lie.[/i]

    Except when the odds are wrong…


  9. Rifkin

    [quote]Except when the odds are wrong… [/quote] I must not have been clear. Your link does not point to “the odds” or the consensus view of the odds based on actual bets. Your link is to a single oddsmaker. And even in the case of Wayne Allyn Root (who ran for vice president against Obama on the Libertarian ticket with Bob Barr in 2008), he is not (AFAIK) offering up money odds on this election. That is, Root is not saying that Romney is 90% to win and he will accept anyone’s bet while giving the bettor those odds. Rather, Root is simply making a prediction with no real money on the line.

    The constrast is with “the odds.” They are not made by a linemaker. They are not made by one or two or a dozen gamblers. They evolve after thousands and thousands of bets are laid. And they keep changing daily as we get closer to the election. In the Obama-Romney case, they have swung fairly narrowly for a few months from Obama winning roughly 70% of the time to Obama winning 80% of the time. (Of course, Romney’s swing has been on the other end, from 20% to 30%.) So now the odds are about 75-25% in favor of Obama winning. That is what “the odds” say. That is not a meaningless guess by a meaningless oddsmaker who loses no money to say what he says.

  10. Rifkin

    I should, nonetheless, add this to my post: the odds, of course, can be wrong. They say now there is a one-in-four chance that Romney wins. If that does not change from here to November 6 and Romney does win, then most gamblers got it wrong. But even then, it’s not the case that 99% of the money is on Obama. Having a 25% chance at victory is 12,500,000 times better than your chances of winning a one-in-fifty million lottery. Yet (almost) every time a lottery is held, someone beats those odds.

  11. hpierce

    The key words are “winning the election”, i.e., the electoral college votes. If I was betting money, I’d take certain states as given… no realistic chance that CA’s electoral votes will go for Romney (~ .005%) chance, and Obama is likely not to get UT’s electors. That leaves the “swing states”… the polls in those states are the only ones I’d be wagering my money on.

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