If voters approve the measure, the state sales tax would rise from 7.25 percent to 7.5 percent from Jan. 1, 2013 to Jan. 1, 2017. In addition, income taxes for residents making more than $250,000 would also see a 2 percent hike for a six-year period.
The tax might be a potential shot in the arm for sagging community college system. According to the California Community Colleges Chancellor’s office, enrollment figures for its 112 colleges have decreased by more than 450,000 students since the 2008-2009 school year.
The decrease coincided with the state budget crisis, as funding for the system has dipped by more than $802 million over the same time period, or a decrease of about 12 percent.
So it is no surprise that support for the Governor’s initiative has come from community college advocates. Brown estimates that a “yes” vote would allow the state to give the system an extra $210 million in “deferral buyback dollars.”
This editorial falls in line with the rest. And that is thanks to Gov. Jerry Brown himself, who deserves a large share of the blame for placing community colleges in the position they are in today.
It is important to make one thing clear—the unanimous support comes from the lack of a better choice.
Proposition 38, the competing tax initiative on the Nov. 6 ballot, would also call for a tax hike, but the proceeds would only go to the K-12 education system. The proposition that garners the most votes will override the other.
What’s interesting is that few are mentioning the strong-arm tactics Brown is using to push through his initiative. If his proposal were to fail, the entirety of the state education system would face about $6 billion in cuts, with $338 million coming out of community college coffers.
Oddly enough, the $338 million in additional cuts has already been written into the governor’s 2012-13 state budget as a contingency plan.
But if the proposal passes, there will be no net gain to the community college system.
The deferral system allows the state to delay payment of a percentage of funds to schools from one fiscal year until the next. It’s a classic case of “Yes, I owe you, but I didn’t say when I’ll pay,” seeing as the current amount deferred to the K-14 schools totals more than $961 million.
So in reality, the $210 million in “buy-back” dollars is money the state already owes colleges, but the figure seems as shaky as a California earthquake.
If Brown were an accountant for a business—any business—he would have been fired a month after he started.
The governor has done a horrendous job when it comes to accurate tax estimates, but an excellent job at highballing revenues and lowballing expenditures. In January 2012, he projected a state budget shortfall of $9.6 billion.
Five months later, that shortfall had increased to $15.7 billion. At that time he introduced the previously mentioned budget—the one that predicted the state would collect $1.5 billion from the Facebook initial public offering, four days before the stock made its debut at $38.
Today, Facebook shares are worth nearly 50 percent less than their opening value at $20.28. Brown expected the stock would sell at $35 during its first six months.
The cherry on top is that the $210 million in buybacks was also originally estimated at $313 million in May.
Community college students, faculty and staff have seen firsthand the results of the state budget crisis. We support the tax initiative because we have to. But that doesn’t mean we can’t call it what it is—an old-fashioned protection racket.