Melissa Griffin: Battle Over California Tax Propositions Heats Up

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A California polling place

Voters cast ballots at a California polling place (Eric Thayer/Getty Images)

SACRAMENTO (CBS SF) — As Election Day nears, commercials on both sides of Governor Jerry Brown’s tax measure are looking to inspire voters, and not always in a forthright way. Also, the Munger family gives Brown a big headache.

Dirty Thirty: Prop 30 on November’s ballot would increase the income tax on annual earnings over $250,000 for seven years and increases the state sales and use tax by ¼ cent for four years.

Commercials on either side of this debate are now under fire for lying to the viewing public.

On the pro-Prop 30 side, at least 5 ads were released last week, three of which say something like, “Sacramento politicians can’t touch the money” Here is a video for Prop 30. See State Controller John Chiang say the money “can’t be touched by Sacramento politicians.”

This is not really true. (It’s funny anyway that the commercials would denounce “Sacramento politicians” since that’s exactly who created and is backing Prop 30.)

On the other side of the debate are ads that say “Prop. 30 provides no guarantee of new money for schools.”

Both are misleading.

Here’s how it really works: Prop 30 raises $8.5 billion per year, $2.9 billion of which will go toward a $10.4 billion debt the state owes to education funding. The other $5.58 billion goes to an Education Protection Account and can only spend money on education. However, this just frees up the same amount in regular general fund to be used for other purposes – pensions, social services, etc. So, the fund is not in addition to money already being spent on education. Sacramento can’t touch the money in the fund, but they will have their hands on the money freed up in the general fund. Read the Legislative Analysts Report.

On the other hand, it’s not true that Prop 30 offers “no guarantee of new money for schools.” The way education funding in California is calculated relies on the amount of money coming in the door. In this case, with billions more coming in each year, that algorithm changes and education is entitled to a little more money, but far, far less than the $8.5 billion from the new tax.

2) Munger Pains: One of the biggest contributors to the No On 30 Campaign is Charles T. Munger, Jr., son of Warren Buffet’s business partner Charles Munger, Sr. Reportedly, he’s given $23 million to the Small Business Action Committee PAC, which in turn gives to the No on 30 campaign, among other things.

Munger is a politically active Republican, so this isn’t unusual, but this part is: his sister, civil rights attorney Molly Munger, has given $28 million (NOTE: now $31 million.) to support a measure that is directly in competition to Prop 30.


Proposition 38 is a tax increase where the proceeds do directly go to schools, bypassing Sacramento.

(This one actually “can’t be touched by Sacramento politicians.”) Conventional wisdom is that by having two measures on the ballot that call for higher taxes for education will split the vote and result in one or both measures failing.

Indeed, earlier this year Brown tried to convince Molly Munger to take her measure off the ballot.

In other words, Charles Munger, Jr.’s outright opposition combined with his sister Molly’s indirect opposition to Prop 30 means that the Munger’s are officially off Brown’s Christmas list.

(Copyright 2012 by CBS San Francisco. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)

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