Big price, little time for initiativeCFT folds on collecting for Millionaires Tax
The California Federation of Teachers has stopped collecting signatures for its Millionaires Tax, throwing its full effort into an expensive race against time to qualify an initiative it negotiated last week with Gov. Jerry Brown.
The union had vowed to continue its own initiative drive as a backup in case the compromise effort with the governor was flagging. But there was always a question whether the CFT, slightly more than a third the size of the California Teachers Association, had the heft to succeed with one initiative, let alone two.
The new Brown/CFT initiative promises to be one of the most expensive, if not the most expensive, state signature drives. It has about seven weeks to collect around 1.2 million signatures: the minimum 805,000 signatures to qualify an initiative that includes a constitutional amendment, plus a cushion of 300,000 to 400,000 signatures. The compressed time frame has driven up the market price to $4 per signature for the new initiative – twice the $2 per name for other initiatives. And, come close to early May, that price may rise some more. That’s at least $4.5 million to $5 million to qualify the new initiative for November.
Jeffrey Freitas, CFT secretary/treasurer, told me that the campaign has promises for the money, and he’s confident it will come in. The CFT will put in at least “a couple million,” and other unions and grassroots organizations in its partner, the Courage Campaign, will deliver, too.
This week, signature collectors hit the street. With friends in high places, Brown was able to get Attorney General Kamala Harris’s office, his old shop, to approve the revised title and summary on the new initiative in three days, instead of a month or longer, in effect giving Brown three more weeks to gather signatures before the practical deadline to submit names to county election officials in early May. (The record, I’m told, is the 33 or so days it took to qualify Indian gaming on the ballot in 1998.)
This weekend could be critical. The CTA’s State Council, its 745-delegate decision-making body, will have its quarterly meeting in Los Angeles. It’s expected to decide how much money to spend for November, and how to spend it. The CTA, a key ally of Brown, couldn’t be happy that its junior brethren at the CFT have upped the price for initiatives. Since Brown at this point is still collecting signatures on his original initiative, the CTA faces the prospect of splitting and increasing its contributions. It and other unions are already facing another potentially costly battle against a “paycheck protection” initiative that would deny public unions the right to deduct members’ dues for political purposes.
Brown’s initiative called for a four- to five-year temporary tax, raising the sales tax a half percentage point and the income tax on individuals earning more than $250,000. The money, between $5 billion and $7 billion, would have gone to the General Fund. The CFT’s Millionaires Tax would have been a permanent tax increase, raising the income tax on those earning $1 million by 3 percentage points, and 5 percentage points on those earning more than $2 million. The money, between $7 billion and $9 billion, would have gone into a trust fund, with 40 percent committed to higher education.
The merged initiative calls for only a quarter percentage point increase in the sales tax for four years and a seven-year increase in the income tax on individuals earning more than $250,000. The rate increases for millionaires would be higher than Brown called for but less than the CFT proposed. The money would go to the General Fund, which faces as much as a $9 billion deficit.
The California Business Roundtable and the California Chamber of Commerce earlier this month came out against the CFT initiative but withheld support for Brown’s. What happens next is a matter of great speculation. Brown will need business backing, particularly if there is well-funded opposition to the new initiative. Occidental Petroleum and Kaiser Permanente are among companies that contributed to Brown’s original initiative, and Brown told the Sacramento Bee Tuesday that Occidental remains on board.
Loren Kaye, president of the California Foundation for Commerce and Education, which is affiliated with the California Chamber of Commerce, said that the Chamber remains concerned about the initiative’s impact on the business climate but had not yet begun talks with Brown. Robert Lapsley, president of the Business Roundtable, said that the organization’s board would not take up initiatives again until June at the earliest. It was unalterably opposed to the permanent tax increase proposed by the CFT; the seven-year increase will be looked at, he said, but the board had made clear that it would consider the larger context of the need for pension reform and other legislative actions to improve job creation.
Three-way overtures with Molly Munger
Meanwhile, lest she be forgotten, civil rights attorney Molly Munger launched a 30-second TV ad in Los Angeles and San Francisco this week promoting the other tax initiative heading for November. Her Our Children, Our Future plan would raise $10 billion for early education and K-12 schools through an increase in the graduated income tax for 12 years – a “shared sacrifice, shared benefit,” in the words of campaign manager Addisu Demissie.
The ad makes the case for education funding and promotes a calculator that enables viewers to see how much money would go to their local school through the initiative.
The initiative is backed by the California State PTA, which has more than 1,000 volunteers in the field collecting signatures, according to Demissie. Because it would require a statutory change, not a constitutional amendment, the initiative needs 300,000 fewer signatures than the governor’s to qualify.
The TV ad is not a response to those calling for the campaign to give way to Brown’s initiative, Demissie said. “It’s targeting folks receptive to our message to let them know there is reform on the ballot in November that will send money directly to schools.”
Brown would like Munger to drop her initiative, but hasn’t met with her. However, he told the Los Angeles Times he did briefly speak with her for the first time last week and that his wife, Anne, had an email exchange with Munger. “She sent my wife a nice email and my wife responded,” the governor told reporters. “And then she responded back. So that’s where we are. But we do have two incompatible initiatives.”