Monday, November 04, 2013

Jerry Brown and Proposition 30, a year later

I don't post nearly enough about Jerry Brown's current gubernatorial administration in California.

This is a nice update on one of his signature achievements, leading Proposition 30 to a popular vote victory a year ago: Jessica Calefati and Josh Richman, Proposition 30: A year later, California schools seeing benefits of tax measure Oakland Tribune 11/02/2013. They write:

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 dislike the "some say" construction. And "sound budgeting" at a state level is a whole different matter than budget policy at the national level.

But the article reminds us that Jerry stated frankly the program implications of the previous situation. And established the credibility in her first nearly-two years in office that he could explain that there was a distinct choice between the tax alternative and program cuts. As Calefati and Richman report, "If Proposition 30 had failed, $6 billion in automatic "trigger" cuts would have gone into effect."

And Jerry persuaded the California electorate to make the choice he favored. All without mimicking Republican rhetoric about belt-tightening and so forth.

One of the arguments opponents made was that wealthier people - Job Creators, to Republicans - would flee the state. Calefati and Richman take a good shot at that argument:

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. [my emphasis]
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