Local business groups are split on Gov. Jerry Brown’s tax initiative and another measure on November’s ballot that would rein in the power of unions to raise funds for political campaigns.
Proposition 30, the Brown tax measure, and Proposition 32, the so-called paycheck protection initiative, stirred up the most debate among the measures on the Nov. 6 ballot.
In a Business Journal survey of local business groups, two support the tax initiative, which would increase personal income taxes, two oppose and three went neutral. If the measure fails, $6 billion in education cuts will take effect.
In the chamber debates, many board members said they felt compelled to support the proposition to prevent the cuts.
“While we usually oppose tax measures, a lot of our concern here was based on drastic cuts to education if this fails,” said Stuart Waldman, chief executive of the Valley Industry and Commerce Association, which supports Proposition 30. “California State University Northridge administrators told us that if this fails, they would have to cut 800 classes. We’re talking about our future workforce here and that’s just not acceptable.”
But other organizations’ board members felt that temporary tax increases without any longer-term plan to restore the state’s fiscal health and economic competitiveness were not justified. Also, some said that they resented that Brown and state legislative leaders held current school funding hostage to the outcome at the polls.
“The governor and the Legislature put education in crosshairs,” said Gary Toebben, chief executive of the Los Angeles Area Chamber of Commerce. But he noted that there were also strong opinions in favor of the measure.
“The debate was passionate on both sides,” Toebben said.
These two sides balanced each other out in debates among board members of the Los Angeles, Long Beach and Pasadena chambers, prompting them to declare they were neutral on the measure.
Proposition 30 would increase personal income taxes on earnings of more than $250,000 for seven years and increase the statewide sales tax by a quarter percentage point for four years. The state’s Legislative Analyst Office estimates the measure would generate roughly $7 billion a year more in state tax revenue for the first four years; the money would go to schools, public safety and other state programs.
The debate has been just as intense on the paycheck protection initiative. Proposition 32 would ban unions and corporations from using payroll deductions from their members or employees for political purposes. Since this is the primary way unions raise money, it could have a significant impact on their ability to raise political funds.
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