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Prop 30 Extension Backers' Budget Claims Misleading

Ben Adler / Capital Public Radio

The campaign for a voter initiative that would extend the income tax increases on the rich held a news conference on Wednesday May 11, 2016, at California Middle School in Sacramento.

Ben Adler / Capital Public Radio

As a coalition of interest groups announced the launch Wednesday of a ballot measure to extend income tax increases on the wealthiest Californians, speakers painted a dark picture of what would happen if voters rejected it.

“When we cut $5 billion and (school districts) start raising the class size, and cutting art and music, cutting counselors and nurses and librarians and librarian technicians and custodians, their classrooms aren’t gonna be able to kept clean and all that maintenance stuff – this is (students') time and they lose that time forever,” says California Teachers Association President Eric Heins.

The proposed initiative, which is expected to qualify for the November election, would extend the Proposition 30 income tax increases that voters approved in 2012.

Supporters – such as unions, school groups, doctors and hospitals – say California’s schools and state budget will be in dire financial shape if the income tax increases expire as scheduled in 2019.

But two of their claims – displayed prominently on a posterboard next to the speakers, on a flyer distributed to reporters in a media packet, and on the campaign's website – don’t hold up to scrutiny:

  • a nearly $5 billion cut to public schools
  • a state budget deficit of nearly $3 billion.

The campaign points to data from the governor’s Department of Finance for both of those claims.

But it turns out the state’s financial picture is not nearly as alarmist as the campaign suggests.

“Looking at the numbers, I can see how they come up with dollar amounts that they do,” says Sacramento State political analyst Steve Boilard, who spent years crunching budget numbers for the state’s non-partisan Legislative Analyst’s Office.

“But I think it’s framed in a way that seems much more dire than it should otherwise be interpreted.”

The Department of Finance, while neutral on whether Prop 30 should be extended or not, took issue with both claims too.

Schools do not stand to lose $5 billion if the tax increases expire. They’d just get $5 billion less than they otherwise would – but they’d still get more money than they did the year before. So it’s not like schools would have to take the drastic steps like the sharp increases in class sizes that they did during the Great Recession.

And as for the $3 billion state budget deficit claim, that’s just one way of reading the numbers – the most pessimistic way. The deficit could be less than $1 billion, or even a surplus.

All of which is to say: There may be perfectly good reasons to extend the Prop 30 income tax increases this fall. But a looming state budget crisis isn’t one of them.

Note: This story has been updated to clarify that Gov. Brown's Department of Finance is neutral on whether the Prop 30 income taxes should be extended or not. Also, our original story said schools would not have to cut class sizes if Prop 30 is not extended; it's been corrected to say that schools would not have to increase class sizes.

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