Molly Munger’s Multi-Million-Dollar Bet
By Peter Schrag
With the $2.1 million she plunked into her school tax initiative campaign last week, Molly Munger is now in for about $6 million and, she says, prepared to spend a lot more.
The conventional political wisdom maintains that Munger, a Los Angeles lawyer and long-time civil rights activist with a deep purse, should get out of the way of Gov. Jerry Brown’s vaguely similar tax proposal – that when voters are confronted with two similar-sounding tax measures on the same ballot they’ll vote against both.
But what if the conventional wisdom is wrong? That’s what Munger believes and she’s prepared to put a lot more of her millions where her mouth is.
She would never suggest that Brown get out of her way – says she doesn’t have the chutzpah for that – but, as she put it last week, why not give the voters a choice? Because her campaign started collecting signatures long before Brown started his, she expects to qualify sooner. When she does, she hopes to ask Brown to, in effect, endorse both.
The two proposals are in fact quite different. Munger’s calls for a progressively-scaled ten-year income tax increase for all Californians except the poorest, ranging from .4 percent for low-tier earners to an additional 2.2 percent for those making over $2.5 million. It would generate about $10 billion a year, nearly all of which would go to K-12 education and pre-school programs. Some would also go to reduce the state’s school bond debt, which would lighten the load on the state’s general fund.
Brown’s proposal is smaller and squishier. It would produce roughly $7 billion – maybe a little more -- by raising income tax rates on high earners for seven years and increasing the sales tax by ¼ cent, roughly 3 percent, for four years. The additional revenues would go mostly to schools and community colleges but with enough hidden corridors and trap doors to, as the official language says, “address the state's budgetary problem by paying for other spending commitments.”
Maybe most telling, it doesn’t generate enough money even to get California’s shamefully inadequate school funding to the national average.
The Brown measure in in fact the camel that was a horse created by a committee – as a set of compromises with education groups designed to appeal to voters willing to tax the rich (and maybe their free-spending spouses) rather than themselves. The schools, as ever, are the come-on.
The gimmicks in Brown’s proposal are not all bad. In California’s strait jacketed fiscal system and its dysfunctional initiative-driven governmental processes, almost every inch of wiggle-room is probably a good thing. As even Siberian hermits probably know, Californians would vote money for schools long before they’d tax themselves for anything else – and certainly long before (if ever) for unrestricted general fund spending by politicians in Sacramento.
Assuming, of course, they’d tax themselves for anything at all.
On that score, the early polls aren’t at all encouraging for Munger. But she says that when voters in focus groups are told that the money goes to schools, and that it’s hedged with provisions preventing Sacramento from meddling with it, attitudes go from negative to positive. She’s betting on the better angels in the hearts of the electorate.
But she still faces terribly long odds, not least because the great majority of the kids who she hopes will trump everything are no longer the children or even the grandchildren of the aging white voters who still dominate the electorate; they’re the brown and Asian children of immigrants. Even Brown’s proposal, which doesn’t raise income taxes on anybody but the big earners, is hardly a sure thing.
As policy, however, the Munger proposal makes more sense. By relying still more on high-end taxpayers and their capital gains, Brown’s proposal will expose the state still more to the swings in revenue that come with the cycles in the economy. Munger’s does not – or does so to a lesser extent.
More important, however, is that Munger seeks to restore some sense of common responsibility – a sense of community – to a society that, ever since the 1970s, has become increasingly disconnected from it.
Beginning with the passage of Proposition13, and maybe even before, that sense of community has been gradually supplanted by a market ethic. A lot of what had been regarded as public goods – freeway interchanges and utility lines for new housing developments, university education, access to public parks and recreation areas, after-school programs, in some places even what had once been called freeways – came to be treated as private benefits to be paid by the user.
That, too, was not always bad. Should the taxpayer have to subsidize the green fees at public golf courses? Should she have to underwrite tuition for the children of millionaires at the University of California? Should the cost of levees to protect fancy housing in flood plains be loaded on the state’s bonded debt – as, oddly enough, it still is?
But the erosion of the sense of community that underlies so much of our public policy in the last three generations is not a good thing, and when it destroys schools and other children’s programs it’s a terrible thing. Munger’s initiative may be Quixotic, but in trying to restore a touch of community itdeserves only support and admiration.
Peter Schrag, whose exclusive weekly column appears every Monday
in the California Progress Report, is the former editorial page editor
and columnist of the Sacramento Bee. He is the author of Paradise Lost:
California’s Experience, America’s Future and California: America’s High
Stakes Experiment. His newest book, Not Fit for Our Society: Nativism, Eugenics, Immigration is now on sale. View his past work on California Progress Report here.