Spending missteps make Brown tax plan a hard sell

[August 22, 2012]  SACRAMENTO, Calif. (AP) -- California Gov. Jerry Brown has made austerity a hallmark of his administration, telling state workers they must turn in their cellphones, selling off state vehicles, severely reducing employee travel and cutting billions from the general fund.

Brown was counting on that record to help him sell his November ballot initiative seeking to boost the state sales and income taxes temporarily to close what was a $15.7 billion budget deficit and avoid further cuts to education.

Yet a summer of headlines about state spending scandals and Brown's own push for some of the nation's most expensive infrastructure projects has threatened to undermine that carefully crafted message and jeopardize the success of his tax initiative.

Opponents are mocking his message that voters can be assured their money will be handled responsibly if the higher taxes are passed. The critics also pounced on a scandal in which state parks employees hid millions of dollars while threatening to close dozens of parks.

One group opposing his initiative asked in a radio ad this week: "What else are they keeping from us?"

The bad news for Brown also includes a disclosure of pay raises to legislative staffers already making six figures. And at a time when he says the state does not have enough money for schools, he approved the first stage of a $68 billion high-speed rail system and announced plans for a $24 billion tunneling system to move water from north to south.

His initiative also faces several competing tax questions, including a well-financed campaign to raise state income taxes for education and dozens of tax increases pushed by local governments.

It all adds up to a tough sell for a governor who says he wants to end the state's cycle of crippling budget deficits.

As Brown kicked off his campaign for Proposition 30 at a Sacramento high school last week, he sought to emphasize that most of the revenue from the tax increases would come from Californians who are among the wealthiest; an extra $4,500 a year for millionaires, he said.

"This is not about any other issue. It's not about pensions, it's not about parks. It's about one simple question," the Democratic governor told reporters outside the school. "Shall those who've been blessed beyond imagination give back 1 or 2 or 3 percent for the next seven years, or shall we take billions out of our schools and colleges to the detriment of the kids standing behind us and the future of our state?"

The budget Brown signed into law this summer includes about $6 billion in automatic cuts to schools, higher education and other state programs that could take effect if voters reject the tax increases -- a tactic intended to help sell it because voters are more inclined to raise taxes for education than any other cause. Some school districts could cut three weeks from the school year if the tax initiative fails.

Proposition 30 calls for higher tax rates on incomes of more than $250,000 for seven years and a quarter-cent increase in the statewide sales tax for four years.

Brown is keeping a campaign promise not to raise taxes without a public vote, but has been forced to defend himself against problems not of his making.

Legislative leaders were compelled to acknowledge that they had handed out hefty pay raises to staffers, including some who already had six-figure salaries.

Then it was revealed that a bureaucrat in the state parks department had authorized a secret vacation buy-back program for senior staffers, netting them thousands of dollars each, and Brown's administration revealed that state parks officials kept $54 million hidden for more than a decade as Californians were being asked to help save 70 parks.

That led to an investigation into accounting irregularities in hundreds of other special funds, many of them financed by voter-approved fees and taxes.

"Convincing voters to tax themselves is always an uphill fight, but every one of these incidents over the summer makes his path a little bit steeper," said Dan Schnur, director of the Jesse M. Unruh Institute of Politics at the University of Southern California and a former Republican consultant.

The high-speed rail plan, which has come under intense criticism, already has been targeted by the opposition campaign, which seized on the summer's missteps as evidence that politicians can't be trusted with more tax revenue.

The No on 30 campaign released an Internet video coinciding with the end of the Legislature's summer recess to "welcome politicians back from vacation," using television coverage of the scandals and misspending.

"All of these issues speak to the management of our tax dollars in Sacramento ... and that is a part of this discussion on Prop. 30," said Joel Fox, president of the Small Business Action Committee and a spokesman for the opposition campaign.

California voters are generally not inclined to support tax increases and have rejected the last eight statewide measures on the ballot, including a June proposal to raise taxes on cigarettes to fund cancer research.

They are far more likely to support taxes on the rich rather than themselves, but Brown's initiative includes a sales tax hike that undercuts that selling point. This year, he persuaded union supporters to drop a more popular "millionaire's tax" in favor of his plan.

Still, the opposition campaign has anemic funding from business groups that back it compared with the millions from Brown's union allies.

Backers of Proposition 30, which had a slim lead in summertime polls, have raised more than $10 million to date, with millions more pledged by independent supporters. Opponents have collected less than $500,000.

The governor said if voters reject the taxes, he'll follow their will and make deep spending cuts. But he hoped they will be able to focus on the risk to schools if his initiative fails.

"Proposition 30 is only one thing: it's either a yes or a no," he said. "And it's about schools, it's about money, it's about balancing the budget, it's about public safety. And people will decide."

[Associated Press; JULIET WILLIAMS]

Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.