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Proposition 30 Sales and Use Tax Rate Increase - MEDIA RESOURCE

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The Board of Equalization administers California's sales and use, fuel, alcohol, tobacco, and other taxes and collects fees that fund specific state programs and plays a significant role in California property tax assessment and administration. It also acts as the appellate body for corporate franchise and personal income tax appeals.

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Second-graders would miss lessons on prefixes and suffixes.

U.S. history students would gloss over the civil rights movement.

Parents would have to find three extra weeks of day care for their kids.

Standardized state tests and Advanced Placement exams would be disrupted.

And hundreds of thousands of Los Angeles Unified students would miss out on nearly 10 million healthful meals.

With polls showing support slipping for Proposition 30, Los Angeles Unified is bracing for the budget cuts that would be triggered if the tax-increase measure fails on Tuesday. To offset the cuts, the state is allowing districts to shave 15 days off their 175-day school calendars this year - and up to 15 additional days next year - a move that LAUSD officials fear could jeopardize students' hard-won academic gains and hinder efforts to prepare them for college or a career.

"A 160-day school calendar is unheard of," said Jaime Aquino, LAUSD's deputy superintendent for instruction. "This is subpar to what Third World countries are offering their students when it comes to an instructional day."

Backed by Gov. Jerry Brown, Prop. 30 would fill a $6 billion hole in the state budget by raising the sales tax by a quarter-percent for four years and the income tax on wages over $250,000 for seven years. Supporters say the revenue would also repay money withheld from districts during the recession and restore education funding to mandated levels.

An outright defeat of Prop. 30 or a win by rival Prop. 38 would trigger $6 billion in cuts to California's public schools, community colleges and universities.

If forced to slash $255 million from its 2012-13 budget of $6 billion, LAUSD would end its school year on May 10 rather than the scheduled date of May 31. Officials estimate LAUSD's deficit for 2013-14 would swell to $650million, forcing them to cut up to 10 more days from the school calendar.

Education leaders are deeply worried about the loss of instructional time and how that would affect student test scores, high school graduation rates and highly competitive college admissions.

There are also concerns about how a truncated school year would affect the state's standardized tests, which are supposed to be given when 85 percent of the material is covered - typically in late April or early May.

A solution would also have to be found for the 25,000 or so LAUSD students enrolled in Advanced Placement courses, which allows them to earn college credit. Students nationwide are scheduled to take the AP exams next May 6- 17 - nonnegotiable dates that straddle what would be the last day of school for local kids.

"If I could, I'd set aside some of our Title I money to pay teachers to come back and administer the tests," said Judith Vanderbok, principal at Van Nuys High School, where two-thirds of this year's 1,100 AP test-takers scored well enough to earn college credit.

Officials also worry about issues outside of the classroom, like the lessons forgotten during summer vacation that suddenly would be lengthened by nearly a month.

And about economically stressed families faced with finding day care for their children for three extra weeks.

And the low-income students who eat federally funded breakfast and lunch at school each day, adding up to 9.75 million free meals over a 15-day period.

"It would be a massive loss," said David Binkle, the district's Food Services chief. "Think about yourself, if you go without half the food you eat for a month.

"This will affect not only children but their families, who will have to spend money they don't have. I think you'll see pressure on other points, like food stamps, regional food banks and Head Start. There will be a huge impact."

Loss of instructional time

LAUSD officials and teachers are taking a hard look at what might be lost under a shortened school calendar. A draft report by Aquino details the specific lessons that would be abbreviated or abandoned, and the cascading effects of the potential changes.

Second-graders wouldn't be taught about syllables, prefixes and suffixes, for instance, skills they need to tackle more complex reading material in third grade. The following year, those kids would have to spend weeks catching up on the basics, shortchanging their mastery of the third-grade skills needed in fourth grade and beyond.

Aquino is especially concerned about LAUSD's 39,000 eighth-graders who, coincidentally, make up the first class that will have to pass the rigorous college-prep curriculum with at least a C to graduate from high school in 2017.

A shortened school year would make it even more difficult to teach algebra - a historically troublesome subject - along with fundamental components of science and history they'll need for state tests and high school courses.

The eighth-graders would lose a three-week unit on persuasion. The ability to research, build and express a constructive argument is a key element in high school and the new Common Core curriculum being implemented in 2014.

At Mulholland Middle School in Lake Balboa, eighth- grade English teacher Michelle Sawyers has developed a persuasion lesson that uses a series of debates to develop her students' ability to research, write, speak and listen.

"Persuasion is a gift that lives forever," said Sawyers, named as an Educator of the Year by the California League of Middle Schools. "It lets us listen to our voice, and experience the full bounty of various types of understanding."

Those debates would be lost, she said, as would a popular "poetry lounge," that allows her students to showcase their talents - musical, speaking or dramatic.

"It's dynamic, and lets them show off their outside skills and build their inner confidence," she said. "I want to create an environment that stretches their limits, and gives them 54 minutes of joy that for these children becomes a game-changer."

Propositions lose support

A Public Policy Institute of California poll released last week shows that support for Prop. 30 has slipped from 52 percent in September to 48 percent. Support for Prop. 38, which would raise the income tax for most Californians, dropped from 45 percent to 38 percent. Prop. 38 would provide some $10 billion for K-12 schools, but would take longer before it takes effect. If both measures win a majority, the one with the most votes becomes law.

Critics of Prop. 30 say the sales-tax increase would be a hardship for consumers and put small business at a competitive disadvantage as California tries to recover from the recession.

Others blast state lawmakers for passing a budget that presumed passage of Prop. 30, a move they liken to blackmail of California's voters.

"The Legislature balanced the budget on the back of schoolkids," said Doug Boyd, a member of the Los Angeles County Board of Education and an opponent of Prop. 30.

"It's deceptive and dishonest. This isn't about saving education. It's about politicians not doing their jobs and trying to have public education take the fall for their lack of competence."

Boyd and others have predicted that California's powerful teachers unions would pressure the Legislature to call a special session if Prop. 30 is defeated. The goal then would be to cut $6 billion from programs other than education.

LAUSD weighs its options

Having won a battle last year to keep Health as a graduation requirement, Taft High teacher Bridget Brownell now finds herself weighing which topics to cut from a one-semester course that covers teen sex, drug use, nutrition and mental and personal health.

"We talk about how the choices they make affect the quality of their lives," Brownell said. "Do I not teach suicide prevention? STDs? Do I not talk about tobacco or alcohol or cancer?"

Brownell has come up with a strategy to condense rather than eliminate material, so students would at least get the essentials.

That means students would hear a lecture on anger management but wouldn't have role-playing sessions to reinforce the skills or do a group project on mental health. They'd discuss good nutrition, but a food journal would become extra-credit instead of a classroom assignment.

"These are all really important, and it's frustrating not to have enough time to apply the skills," Brownell said

Although the LAUSD board endorsed both Props. 30 and 38, district officials have clearly focused on Brown's initiative, warning of the dire consequences of the trigger cuts.

Aquino said the crisis couldn't come at a worse time, with LAUSD trying to phase in the Common Core, raise student achievement and increase its graduation rate.

"Will we be able to ensure that students have the skills and time to succeed?" Aquino said. "With 15 fewer days of instruction this year and 25 fewer days next year, it's going to be very difficult."
barbara.jones@dailynews.com
818-713-3710
twitter.com/LADNSchools

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LAUSD bracing for severe cuts if Prop. 30 loses

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Second-graders would miss lessons on prefixes and suffixes. U.S. history students would gloss over the civil rights movement. Parents would have to find three extra weeks of day care for their kids. Standardized state tests and Advanced Placement exams would be disrupted.

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Proposition 30 temporarily increases the state sales tax rate and the personal income tax rates for taxpayers with incomes above a certain level. The revenues generated would be used to fund schools and public safety programs. The state's 2012-13 budget plan-approved by the Governor and the Legislature in June 2012-assumes passage of this measure.

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JACKSON --The state spending less money on local school districts in recent years could result in a reduction in how much it is legally obligated to provide K-12 education in the coming years.

The Mississippi Adequate Education Program funding formula currently would generate $2.36 billion for the upcoming 2013-14 school year for local school districts. If the formula was recalculated for the upcoming 2013 legislative session, as has been discussed, the local school districts would be owed nearly $170 million less from the state.

In per pupil expenditures, Mississippi already is near the bottom nationally --49th --according to the Parents Campaign, a statewide education advocacy group.

Why those automatic cuts would occur is a bit confusing. The key is to remember how the formula works for the Adequate Education Program, which is the method used to provide the state's costs for educating 490,000 public school students.

The formula works by the state Department of Education identifying "adequate" --or successful --districts and determining how much they spend for school operations --the instructional, administrative, maintenance and ancillary costs. Those adequate performing districts that spend significantly more or less than other school systems are not used by the state Department of Education in developing the formula.

Based on the expenditures in the mid-range districts, an average cost per student is developed. Local school districts statewide are supposed to receive that average cost per student multiplied by their average daily attendance.

Because of an unprecedented drop in state revenue collections in 2009-2010, the Adequate Education Program has been underfunded a total of about $980 million since the 2007-08 school year. The 2007-08 school year was the high water mark for education funding. Since then, education funding was reduced every year until the most recent 2012 session where it was increased about $20 million.

In simplest terms, because less state funds have been going to public education, the local school districts have spent less money, meaning the MAEP formula generates less per student.

State Sen. Hob Bryan, D-Amory, one of the chief architects of the MAEP when it was passed in 1997, said local school districts should not be punished because of actions by the Legislature.

"When we passed the formula, we also passed a law requiring the Legislature to fully fund the formula," Bryan said. "...We did not take into account that the Legislature would consistently break the law and not fund the formula."

Bryan and some Democrats, such as former House Education Chair Cecil Brown of Jackson, said they believe the intent of the Republican leadership of the Legislature is to look for ways not to fund the formula.

"I don't think people understand how severe the problem is," Bryan said.

But Republican Lt. Gov. Tate Reeves said the goal is to keep education a top priority and to put as much money in the program as possible during the 2013 session, though he stopped short of promising full funding.

Reeves pointed out that during the 2012 session --his first as lieutenant governor --education funding was increased.

He said going forward "we are going to do everything we can to increase funding for public education. That is where our priority is."

Under current law, the MAEP formula is recalculated every four years. In the three years between recalculation, the districts are supposed to receive an inflationary adjustment.

There has been talk of changing the law so that the formula is calculated every year, which was how the law was originally written.

If the law were to be changed during the 2013 session to recalculate then, it would produce about $167 million less for the local school districts, according to Senate Education Chair Gray Tollison, R-Oxford. If the law is not changed and it is recalculated in 2014, as the law currently mandates, the amount of the cut would be based at least in part on how much money the schools get in the 2013 session.

House Education Chair John Moore, R-Brandon, said changing the law for yearly recalculations is not high on his agenda for the 2013 session, but did not rule out the possibility of the Legislature taking up the issue.

But he said he has interest in "tweaking" the law to send less money for administrative costs and more for the classroom.

Tollison said that could be done by using only districts deemed to be the most efficient in calculating how much the formula would generate for administrative costs.

Tollison said that change would save about $20 million annually, which could be directed toward the classroom.

bobby.harrison@journalinc.com ___

(c)2012 the Northeast Mississippi Daily Journal (Tupelo, Miss.)

Visit the Northeast Mississippi Daily Journal (Tupelo, Miss.) at www.nems360.com

Distributed by MCT Information Services

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Mississippi School Funding Shortfalls Could Trigger Even Lower Target

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JACKSON --The state spending less money on local school districts in recent years could result in a reduction in how much it is legally obligated to provide K-12 education in the coming years. The Mississippi Adequate Education Program funding formula currently would generate $2.36 billion for the upcoming 2013-14 school year for local school districts.

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Download FISCAL FACT No.420: State and Local Sales Tax Rates in 2014
For our 2015 data on sales taxes, click here.

Key Findings

45 states collect statewide sales taxes.

38 states collect local sales taxes.

The five states with the highest average combined state-local sales tax rates are Tennessee (9.45 percent), Arkansas (9.19 percent), Louisiana (8.89 percent), Washington (8.88 percent), and Oklahoma (8.72 percent).

Virginia, Arkansas, Ohio, and Maine have recently raised sales tax rates.

Arizona, Kansas, and the District of Columbia have recently cut sales tax rates.

Sales taxes rates differ by states, but sales tax bases also impact how much revenue is collected from a tax and how the tax effects the economy.

Differences in sales tax rates cause consumers to shop across borders or buy products online.

( Click on the map to enlarge it. All Tax Foundation.)

Introduction

Retail sales taxes are one of the more transparent ways to collect tax revenue. While graduated income tax rates and brackets are complex and confusing to many taxpayers, the sales tax is easier to understand: people can reach into their pocket and see the rate printed on a receipt.

Less known, however, are the local sales taxes collected in 38 states. These rates can be substantial, so a state with a moderate statewide sales tax rate could actually have a very high combined state-local rate compared to other states. This report provides a population-weighted average of local sales taxes in an attempt to give a sense of the statutory local rate for each state. See Table 1 at the end of this Fiscal Fact for the full state-by-state listing of state and local sales tax rates.

Combined Rates

Five states do not have a statewide sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon. Of these, Alaska and Montana allow localities to charge local sales taxes.[1]

The five states with the highest average combined rates are Tennessee (9.45 percent), Arkansas (9.19 percent), Louisiana (8.89 percent), Washington (8.88 percent), and Oklahoma (8.72 percent).

The five states with the lowest average combined rates are Alaska (1.69 percent), Hawaii (4.35 percent), Wisconsin (5.43 percent), Wyoming (5.49 percent), and Maine (5.50 percent).

State Rates

California has the highest state-level rate at 7.5 percent.[2] Five states tie for the second-highest statewide rate with 7 percent each: Indiana, Mississippi, New Jersey, Rhode Island, and Tennessee.

The lowest non-zero statewide sales tax is in Colorado, with a rate of 2.9 percent. Seven states follow with 4 percent: Alabama, Georgia, Hawaii, Louisiana, New York, South Dakota, and Wyoming.[3]

As a result of new transportation legislation, Virginia's statewide sales tax rate increased on July 1, 2013 from 5 percent to 5.3 percent. Localities in Northern Virginia and Hampton Roads charge a 6 percent combined rate.[4] Also effective July 1, 2013, Arkansas raised its state sales tax rate from 6 percent to 6.5 percent.[5]

On September 1, 2013, Ohio increased its sales tax from 5.5 percent to 5.75 percent as a component of tax reform efforts there this legislative session.[6] Effective October 1, 2013, Maine increased its statewide sales tax from 5 percent to 5.5 percent as a result of a legislative override of Governor Paul LePage's veto. This increase is scheduled to sunset in June 2015.[7]

Arizona, by contrast, cut its rate from 6.5 percent to 5.5 percent as a temporary sales tax increase expired on July 1, 2013,[8] and Kansas moderately cut its statewide sales tax rate from 6.3 percent to 6.15 percent on the same date.[9] The District of Columbia lowered its sales tax from 6 percent to 5.75 percent on October 1, 2013.[10]

Local Rates

The five states with the highest average local sales tax rates are Louisiana (4.89 percent), Alabama (4.51 percent), Colorado (4.49 percent), New York (4.47 percent), and Oklahoma (4.22 percent).

Mississippi has the lowest non-zero average local rate of 0.004 percent, attributable to the state's only local sales tax: a 0.25 percent sales tax in Tupelo, the birthplace of Elvis Presley.[11]

Salem County, New Jersey is exempt from collecting the 7 percent statewide sales tax and instead collects a 3.5 percent local tax. We represent this anomaly as a negative 0.03 percent statewide average local rate (adjusting for population as described in the methodology section, below), and the combined rate reflects this subtraction. Despite the slightly favorable impact on the overall rate, this lower rate represents an implicit acknowledgement by New Jersey officials that their 7 percent statewide rate is uncompetitive with neighboring Delaware, which has no sales tax.

The Role of Competition in Setting Sales Tax Rates

Avoidance of sales tax is most likely to occur in areas where there is a significant difference between two jurisdictions' sales tax rates. Research indicates that consumers can and do leave high-tax areas to make major purchases in low-tax areas, such as from cities to suburbs.[12] For example, strong evidence exists that Chicago-area consumers make major purchases in surrounding suburbs or online to avoid Chicago's 9.25 percent sales tax rate.[13]

At the statewide level, businesses sometimes locate just outside the borders of high sales tax areas to avoid being subjected to their rates. A stark example of this occurs in the northeast part of the country, where even though I-91 runs up the Vermont side of the Connecticut River, many more retail establishments choose to locate on the New Hampshire side of the river to avoid sales taxes. One study shows that per capita sales in border counties in sales tax-free New Hampshire have tripled since the late 1950s, while per capita sales in border counties in Vermont have remained stagnant.[14]

The state of Delaware actually uses its state border welcome sign to remind motorists that Delaware is the "Home of Tax-Free Shopping."[15] State and local governments should be cautious about raising rates too high relative to their neighbors because doing so will amount to less revenue than expected, or in extreme cases, revenue losses despite the higher tax rate.

Sales Tax Bases: The Other Half of the Equation

This report ranks states and cities based on tax rates and does not account for differences in tax bases ( e.g., the structure of sales taxes, defining what is taxable and non-taxable). States can vary greatly in this regard. For instance, most states exempt groceries from the sales tax, others tax groceries at a limited rate, and still others tax groceries at the same rate as all other products.[16] Some states exempt clothing or tax it at a reduced rate.[17]

The taxation of services and business-to-business transactions also vary widely by state.[18] Experts generally agree that Hawaii has the broadest sales tax in the United States, taxing many products multiple times and, by one estimate, ultimately taxing 99.21 percent of the state's personal income.[19] This base is far wider than the national median, where the sales tax base applies to 34.46 percent of personal income.[20]

Methodology

Sales Tax Clearinghouse publishes quarterly sales tax data at the state, county, and city level by ZIP code. We weight these numbers according to Census 2010 population figures in an attempt to give a sense of the prevalence of sales tax rates in a particular state.

It is worth noting that population numbers are only published at the ZIP code level every ten years by the Census Bureau, so the methodology in this version is slightly different than editions of this calculation published before July 1, 2011.

It should also be noted that while the Census Bureau reports population data using a five-digit identifier that looks much like a ZIP code; this is actually what is called a ZIP Code Tabulation Area (ZCTA), which attempts to create a geographical area associated with a given ZIP code. This is done because a surprisingly large number of ZIP codes do not actually have any residents. For example, the National Press Building in Washington, DC, where the Tax Foundation is located, has its own ZIP code solely for postal reasons.

For our purposes, ZIP codes that do not have a corresponding ZCTA population figure are omitted from calculations. These omissions result in some amount of inexactitude but on the whole should not have a palpable effect on resultant averages, because proximate ZIP code areas which do have a ZCTA population number assigned to them capture the tax rate of whatever jurisdiction the area is located in.

Conclusion

Of course, sales taxes are just one part of an overall tax structure and should be considered in context. For example, Washington State has high sales taxes but no income tax; Oregon has no sales tax but high income taxes. While many factors influence business location and investment decisions, sales taxes are something within policymakers' control that can have immediate impacts.

(a) City, county and municipal rates vary. These rates are weighted by population to compute an average local tax rate.

(b) Three states levy mandatory, statewide, local add-on sales taxes at the state level: California (1%), Utah (1.25%), Virginia (1%), we include these in their state sales tax.

(c) The sales taxes in Hawaii, New Mexico and South Dakota have broad bases that include many services.

(d) Due to data limitations, table does not include sales taxes in local resort areas in Montana.

(e) Salem County is not subject to the statewide sales tax rate and collects a local rate of 3.5%. New Jersey's average local score is represented as a negative.

Sources: Sales Tax Clearinghouse, Tax Foundation calculations, State Revenue Department websites

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State and Local Sales Tax Rates in 2014 - Tax Foundation

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Download FISCAL FACT No.420: State and Local Sales Tax Rates in 2014 For our 2015 data on sales taxes, click here. Key Findings 45 states collect statewide sales taxes. 38 states collect local sales taxes. The five states with the highest average combined state-local sales tax rates are Tennessee (9.45 percent), Arkansas (9.19 percent), Louisiana ...

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Report: Nevada education funding formula no longer adequate for urban Clark County

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Nevada lawmakers should ditch an anachronistic education funding formula that favors sparsely populated counties in favor of a new method that awards dollars based on the number of children living in poverty and learning English, according to a new report.

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Proposition 30 picked up a major win Tuesday for education funding in the state of California, and the victory could be due to significant turnout among youth voters.

The ballot measure will raise income taxes on the wealthiest citizens in the state and temporarily increase the state sales tax by a quarter of a cent to fund K-12 schools, community colleges and state universities. Prop 30 is expected to raise more than $6 billion in revenue. If it had not passed, schools and colleges would have suffered significant trigger cuts in state appropriations.

After years of massive budget cuts to public education, California voters appear to have passed Prop 30 by a good margin. With 95 percent of precincts reporting Wednesday morning, Prop 30 was winning 54 to 46 percent.

Gov. Jerry Brown, a Democrat, crafted and championed the ballot initiative, spending weeks campaigning for it.

"I know a lot of people had some doubts and some questions: Can you really go to the people and ask them to vote for a tax?'' Brown asked supporters Tuesday night, according to the San Jose Mercury News. "Here we are ... We have a vote of the people, I think the only state in the country that says let's raise our taxes, for our kids for our schools, and for our California dream.''

Heading into election night, Prop 30 had struggled to reach 50 percent support in several polls, and polling showed a slow decline in support for Prop 30 throughout the fall. Students and faculty members at the University of California and California State University were not wild about Prop 30, but nevertheless supported the measure out of concern that without new revenue, they would continue to see budget cuts and tuition hikes.

Younger voters tended to be much more supportive of the measure, and student governments and Brown worked college campuses to get out the youth vote. Those efforts paid off.

Exit polling shows voters age 18-29 made up 28 percent of the electorate in California, matching or beating every other age group except for the 45 to 64-year-old bracket.

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Prop 30 Scores A Major Win For Education Funding

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Proposition 30 picked up a major win Tuesday for education funding in the state of California, and the victory could be due to significant turnout among youth voters. The ballot measure will raise income taxes on the wealthiest citizens in the state and temporarily increase the state sales tax by a quarter of a cent to fund K-12 schools, community colleges and state universities.

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SACRAMENTO - A year ago today, Californians were still locked in a fierce battle over Proposition 30, Gov. Jerry Brown's ballot initiative that raised income taxes on the wealthy and the sales tax on everyone.

One side argued that the state needed a temporary infusion of cash to keep schools and vital state programs afloat until the economy fully recovered. The other side countered that new tax money would simply line the pockets of school bureaucrats and unionized teachers - and that thousands of overtaxed "job creators" would flee California and throw the state's still-recovering economy into reverse.

But today, few Californians are arguing that Proposition 30, which to the surprise of many political observers sailed to an easy victory in last year's Nov. 6 election, hasn't been a good thing for the state.

It stabilized school funding in California for the first time since the Great Recession began, allowing school districts to avert thousands of teacher layoffs. It helped the Legislature balance its budget for the first time in years without slashing social programs. And it helped a state whose fiscal mismanagement used to be fodder for late-night comedians suddenly become a poster child of sound budgeting that some say Washington, D.C., politicians should model.

"I don't know that taxpayers much appreciated it, but it helped the state cover its costs," said Joseph Henchman, a vice president at the Tax Foundation, a nonpartisan tax research group based in Washington.

Rosemarie Sandoval, a teacher in the San Lorenzo Unified School District, never doubted it would work - for her personally as well as her state.

"I was watching the news last year eagerly awaiting word. When I saw that Proposition 30 had passed, I started jumping with extreme excitement," said Sandoval, 32, who for five consecutive years received a pink slip from the district in March warning her that her future as a teacher in the district was uncertain.

So every June, she would pack up her classroom and anxiously wait to learn if the district could scrape together enough cash to hire her back before the end of the summer. "I felt like all my hard work in the classroom had been reduced to a dollar amount the district had to cut," she said. "Each time, it was a slap in the face."

But this past spring was different. The pink slip never came in the mail.

Indeed, school superintendents and state finance officials say that the tax money generated by Proposition 30 has brought school districts something that had eluded them in recent years: financial stability.

Under the measure, the state's sales tax was increased for four years by a quarter of a cent, costing the average Californian less than $100 a year. But the wealthy were hit harder: Income-tax rates for joint filers earning more than $500,000 - and single filers who earn at least $250,000 - were hiked for seven years from 10.3 percent to as high as 13.3 percent.

The tax increases will net the state's public schools and community colleges about $6 billion annually.

Had Proposition 30 failed, San Lorenzo Unified would have lost nearly $5 million in state aid - larger districts stood to lose a lot more - and teachers such as Sandoval surely would have been in jeopardy once again.

Instead, a few weeks after last year's election, Sandoval was offered a permanent job.

If Proposition 30 had failed, $6 billion in automatic "trigger" cuts would have gone into effect.

Palo Alto Unified would have dipped into its reserves to cover a $5.5 million deficit, a school official said. But many districts, such as Hayward Unified, faced more dire predicaments.

"Hayward would not have had enough in its reserves to absorb an $8 million hit if the tax measure had failed," said Lisa Grant Dawson, the district's assistant superintendent for business. "The district would have been insolvent."

Though public schools would have suffered the most from a Proposition 30 defeat, other parts of the budget, including social programs and the state parks system, also would have faced more cuts.

Some of the tax measure's critics still argue that the state's wealthiest residents are shouldering an unfair burden - and that other Californians will come to regret the decision to raise the taxes of the rich.

No hard data has surfaced yet about multimillionaires making a run for the border. However, there are plenty of anecdotes.

"Instead of a Christmas card, I think I'm going to send your governor a thank-you present," said Chris Plastiras, who owns Lakeshore Realty in Incline Village, Nev., just across the California border on the north shore of Lake Tahoe.

Plastiras said his firm's sales of single-family homes are up 19.2 percent over 2012. Many of those homes are being sold to Californians, he said, and a review by his firm of 50 buyers from California found half of them either became full-time Nevada residents or intend to in the future.

Economic experts, however, warn against reading too much into anecdotes.

Jed Kolko, chief economist and vice president of analytics at the online real-estate marketplace Trulia, said that "taxes have not been the driving factor for migration recently, and it would be a surprise if Prop. 30 had a big effect on people leaving California."

Kolko's study of census data from 2005 through 2011 showed that although California's richest residents face high taxes, lower-income people are more likely to leave. In fact, he said, the state saw a slight net in-migration of households making $200,000 or more during those years.

But Proposition 30's critics contend that even if the rich haven't yet fled California, raising taxes to plug a budget hole is a poor idea.

"We still think it reflects very bad policy and that the state should have done more to reduce spending," said Jon Coupal, president of the Howard Jarvis Taxpayers Association. "Prop. 30 was really nothing more than a coat of paint on a house that's got a rotten foundation."

The state's pension obligations are still crushing, and California is still spending too freely on state workers' salaries and benefits, Coupal said.

Besides, he noted, the taxes eventually will expire.

That's why the Brown administration has resisted some lawmakers' attempts to bring back expensive programs cut in recent years, said H.D. Palmer, a Department of Finance spokesman.

Although the jury is still out on the effect of Proposition 30 on the California economy, initial indications are encouraging. The state's unemployment rate fell eight-tenths of a percentage point - to 8.8 percent - from last November to August. During the same period, the national jobless rate fell a half of a percentage point to 7.3 percent.

At Edendale Middle School in San Lorenzo, where Sandoval teaches sixth grade and three in four students are living in poverty, the extra funding from Proposition 30 has already had a big effect on the staff and students, Principal John Shimko said.

This summer, the district's teacher turnover rate was cut in half, and all of those employees left by choice.

With more familiar adult faces in his halls and classrooms, student behavior this year has already improved. Shimko expects the stability will translate into academic gains.

"This," he said of Proposition 30, "really helped us."

Staff writers Theresa Harrington, Sharon Noguchi and Paul Rogers contributed to this report.

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Proposition 30: A year later, California schools seeing benefits of tax measure

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SACRAMENTO - A year ago today, Californians were still locked in a fierce battle over Proposition 30, Gov. Jerry Brown's ballot initiative that raised income taxes on the wealthy and the sales tax on everyone. One side argued that the state needed a temporary infusion of cash to keep schools and vital state programs afloat until the economy fully recovered.

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A screen shot from a No on 30 commercial (YouTube.com and the No on...)

Opponents of Gov. Jerry Brown's proposed tax increase are doubling down in their latest commercial, offering not one but two whoppers about what Proposition 30 would do.

The measure would increase the state sales tax by 0.25 percentage points and raise the income tax by 1 to 3 percentage points on individuals earning more than $250,000 (and couples earning more than $500,000), generating about $6 billion a year. The money would go into a special fund for public schools and community colleges. At the same time, it would allow the Legislature to take about $3 billion from the General Fund that would have been spent on education and redirect it to other priorities.

The new commercial by the No on 30 -- Californians for Reform and Jobs, Not Taxes campaign features a woman in blue standing at what appears to be a kitchen counter, with two kids sitting at a table in the background doing homework. She looks at the camera and says, "We all want better schools, so Prop. 30 seemed OK." So far so good.
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But then the truth-stretching begins. First she says the tax would hit everyday purchases, including gasoline. But the Legislature exempted gasoline from sales taxes in 2010, so it wouldn't be affected by the increase. The No on 30 campaign argues that the statutory exemption would be overridden by Proposition 30's constitutional changes. But that's nonsense; nothing in the proposition suggests any changes to the lengthy list of items not subject to taxation.

The woman in blue then says that "not a penny" would be "guaranteed to the classroom." Although it's true that not every dollar raised by Proposition 30 would go to education, the state's Legislative Analyst says the measure would raise the schools' "guarantee" of funding "by billions of dollars each year." That's because of Proposition 98, which requires roughly half of the money raised by the state to go to schools and community colleges.

But would the money raised by Brown's measure actually reach the classroom? Yes it would, albeit without the kind of certainty (and strictures) that Proposition 38 would provide. Proposition 30 would let local districts decide how to spend the additional dollars, with this crucial caveat: they "shall not use any of the funds ... for salaries or benefits of administrators or any other administrative costs." They also have to make the decision at a public meeting, and publish a report online accounting for how they spend the money.

Beyond that, the measure would avert $4.6 billion in cuts this fiscal year to public schools, as well as more than $1 billion in cuts to higher education and other state priorities that are scheduled to take effect if Proposition 30 fails. That's because the current state budget assumes the measure will pass and its revenue will be available.

I'll close by quibbling with one other statement in the commercial, that "Prop 30 makes our sales tax the highest in the nation." The state-imposed portion of the tax -- 7.25% -- is already the highest in the nation, according to the Tax Foundation's statistics. But more than a third of that money goes to local transportation, public safety, health and social programs to offset the effects of Proposition 13's limit on property taxes.

Brown's measure presents a clear choice for voters: Do they want to raise taxes to increase funding for schools and other state programs, or do they just want to keep cutting? Evidently the No on 30 campaign doesn't think it can win without muddying the waters.
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The foes of Proposition 30 overstate their case

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A screen shot from a No on 30 commercial (YouTube.com and the No on...) Opponents of Gov. Jerry Brown's proposed tax increase are doubling down in their latest commercial, offering not one but two whoppers about what Proposition 30 would do.

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Proposition 30: Temporary Taxes to Fund Education. Guaranteed Local Public Safety Funding. Initiative Constitutional Amendment.

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Over the last five years, government employment has dropped by 657,000 as a result of the Great Recession's effects on federal, state, and local budgets. With kids getting settled back in the classroom this fall, it's worth considering how much of that drop has hit public K-12 schools.

Of the decline in public-sector employment in the last five years, around 40 percent (258,000) is in local government education, which largely consists of jobs in public K-12 education (the majority of which are teachers, but also included are teacher aides, guidance counselors, and administrators, among others). Over the same period, public K-12 enrollment increased by 1.6 percent. Just to keep up with this growth in the student population, employment in local public education should have grown at roughly the same rate, which would have meant adding 132,000 jobs. Putting these numbers together (i.e., what was lost plus what should have been added to keep up with the expanding student population) means that the total jobs gap in local public education as a result of the Great Recession and its aftermath is around 389,000 jobs, as shown in the figure below.

A "teacher gap" of this magnitude means not only larger class sizes, but also fewer teacher aides, fewer extracurricular activities, and a narrower curriculum for our children. Furthermore, this number almost surely understates the real gap. Between 2008 and 2012, the share of children living in poverty increased from 19.0 percent to 21.8 percent. A higher incidence of child poverty increases the need for services provided through schools. Instead of meeting this need by hiring more personnel, public schools have been forced to eliminate jobs.

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The Teacher Gap: More Students and Fewer Teachers

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Over the last five years, government employment has dropped by 657,000 as a result of the Great Recession's effects on federal, state, and local budgets. With kids getting settled back in the classroom this fall, it's worth considering how much of that drop has hit public K-12 schools.

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SACRAMENTO >> A little more than a year ago, Californians were locked in a fierce battle over Proposition 30, Gov. Jerry Brown's ballot initiative that raised income taxes on the wealthy and the sales tax on everyone.

One side argued that the state needed a temporary infusion of cash to keep schools and vital state programs afloat until the economy fully recovered. The other side countered that new tax money would simply line the pockets of school bureaucrats and unionized teachers - and that thousands of overtaxed "job creators" would flee California and throw the state's still-recovering economy into reverse.

But today, few Californians are arguing that Proposition 30, which to the surprise of many political observers sailed to an easy victory in last year's Nov. 6 election, hasn't been a good thing for the state.

It stabilized school funding in California for the first time since the Great Recession began, allowing school districts to avert thousands of teacher layoffs. It helped the Legislature balance its budget for the first time in years without slashing social programs. And it helped a state whose fiscal mismanagement used to be fodder for late-night comedians suddenly become a poster child of sound budgeting that some say Washington, D.C., politicians should model.

"I don't know that taxpayers much appreciated it, but it helped the state cover its costs," said Joseph Henchman, a vice president at the Tax Foundation, a nonpartisan tax research group based in Washington.

Indeed, school district and state finance officials say the revenue generated by Proposition 30 has brought the public education system something that had eluded them in recent years: financial stability.

Under the measure, the state's sales tax was increased for four years by a quarter of a percent, costing the average Californian less than $100 a year. But the wealthy were hit harder: Income-tax rates for joint filers earning more than $500,000 - and single filers who earn at least $250,000 - were hiked for seven years from 10.3 percent to as high as 13.3 percent.

The tax increases will net the state's public schools and community colleges about $6 billion annually. Had Prop. 30 failed, $6 billion in automatic "trigger" cuts would have gone into effect.

"Proposition 30 was a great savior for schools, and it was a lifesaver for Los Angeles Unified," said Edgar Zazueta, the district's chief of staff for external affairs. "Without it, we would have drowned."

With its first infusion of sales-tax revenue, Los Angeles Unified was able to cancel five unpaid furlough days, restore summer school and adult classes, and avoid more layoffs of teachers, counselors and support staff, whose ranks had been decimated during the five-year recession.

Chaffey Joint Union High School District in San Bernardino County also restored its 180-day calendar, and set aside money to buy supplies and equipment for local campuses and provide tutors for struggling students.

Bonita Unified Superintendent Gary Rapkin said his San Dimas-based district lost $13 million in state funding during the financial crisis but still managed to survive with many layoffs.

"Coming out of that, we're in a pretty good place," Rapkin said. "This year, we're moving forward and reducing class size, hiring 50 new teachers. We've also been able to add intervention teachers for students who are struggling and a liaison to help foster youths navigate the system."

In addition, Rapkin said, Bonita Unified has been able to give raises totaling 4.5 percent to all of the district's employees.

Though public schools would have suffered the most from a Proposition 30 defeat, other parts of the budget, including social programs and the state parks system, also would have faced more cuts.

Some of the tax measure's critics still argue that the state's wealthiest residents are shouldering an unfair burden - and that other Californians will come to regret the decision to raise the taxes of the rich.

"We still think it reflects very bad policy and that the state should have done more to reduce spending," said Jon Coupal, president of the Howard Jarvis Taxpayers Association. "Prop. 30 was really nothing more than a coat of paint on a house that's got a rotten foundation."

The state's pension obligations are still crushing, and California is still spending too freely on state workers' salaries and benefits, Coupal said.

Besides, he noted, the taxes eventually will expire.

That's why the Brown administration has resisted some lawmakers' attempts to bring back expensive programs cut in recent years, said H.D. Palmer, a Department of Finance spokesman.

Although the jury is still out on the effect of Proposition 30 on the California economy, initial indications are encouraging. The state's unemployment rate fell eight-tenths of a percentage point - to 8.8 percent - from last November to August. During the same period, the national jobless rate fell a half of a percentage point to 7.3 percent.

The passage of Proposition 30 allowed Gov. Jerry Brown to implement a new system for funding public education - the Local Control Funding Formula that provides more money to schools with high numbers of poor students, foster youth and English-learners.

With an estimated 80 percent of its 600,000 students considered low-income, Los Angeles Unified expects to get about $300 million more under LCFF. Officials are now grappling with just how to spend it. Some school board members want to use the money to hire more teachers and counselors and give raises to employees who haven't had a pay hike in five years.

LAUSD Superintendent John Deasy supports giving raises, but also wants to use the money to offset a yawning structural deficit.

"The infusion of dollars from LCFF addressed the issue of funding equity but not adequacy," Zazueta said.

"The fact is, we still don't have enough. There still needs to be a conversation about increasing the investment in public education."
Staff Writers Theresa Harrington, Barbara Jones, Sharon Noguchi, Paul Rogers and Beau Yarbrough contributed to this report.

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Proposition 30: A year later, California schools seeing benefits of tax measure

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SACRAMENTO >> A little more than a year ago, Californians were locked in a fierce battle over Proposition 30, Gov. Jerry Brown's ballot initiative that raised income taxes on the wealthy and the sales tax on everyone. One side argued that the state needed a temporary infusion of cash to keep schools and vital state programs afloat until the economy fully recovered.

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Initial Research