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Sales tax hike will be challenge for Brown

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POSTED January 24, 2012 7:27 p.m.

 

SACRAMENTO  (AP) — Gov. Jerry Brown's proposed ballot initiative to raise taxes has wide support among California voters, but his path to victory in November remains far from certain, according to the results of a poll released Tuesday.

More than two-thirds of California's likely voters say they favor the Democratic governor's proposal to raise taxes as a way to stabilize state finances. Yet roughly the same proportion say they strongly disagree with a key element of that plan, raising the statewide sales tax, according to the Public Policy Institute of California survey.

The poll, conducted in mid-January, illustrates the difficulty the governor faces in navigating the state's political cross-currents as he pushes his top priority for 2012.

Likely voters overwhelmingly say they favor raising taxes to pay for K-12 education and support raising income taxes on the wealthy, the cornerstones of the initiative Brown hopes to place on the November ballot. But they also do not want to raise the sales tax, believe the state could spend less money while maintaining the same level of services and are pessimistic about the direction of the economy.

"Therein lies the challenge for the governor," said Mark Baldassare, president and chief executive of the Public Policy Institute. "He has some things he has attached to his tax initiative which do resonate with voters ... but there are lots of other elements to question."

Brown and his supporters have been cleared to gather petition signatures for his initiative, which the governor refers to as "The Schools and Local Public Safety Protection Act of 2012." His title does not refer to the temporary tax increases, which would raise between $4.8 billion and $7 billion a year.

The initiative would boost the statewide sales tax by half a cent for four years starting in January 2013. It also would raise the income tax rate on those making $250,000 a year, increasing it from 9.3 percent to a maximum of 11.3 percent, depending on the amount of income. The income tax increase would start in January 2013 and last for five years.

Most of the additional revenue would be dedicated to K-12 education, with much of the rest funding the governor's plan to have counties house lower-level convicts who otherwise would have been sentenced to state prison.

There is broad agreement among Californians for funding public schools, with 62 percent of likely voters saying they would be willing to pay higher taxes for K-12 education, according to the survey. That question drew support in each region of the state.

Yet the survey also found that just 45 percent of likely voters said they would prefer to pay higher taxes for more government services. Baldassare said the lack of clarity at this point in the minds of voters means Brown will need to build a broad coalition to show widespread support for his tax initiative.

A further challenge: The governor's job-approval rating has slipped since he took office a year ago and remains below 50 percent.

One question on which Californians seemed certain was raising taxes on the wealthy, with 68 percent of likely voters saying they support raising the top state income tax rate on the wealthiest. A slight majority of Republicans, who generally disagree with tax increases, opposes raising the income tax rate.

Of concern for Brown is the response to the other tax component of his ballot initiative.

Among likely voters, 64 percent said they oppose raising the state sales tax to 7.75 percent, including majorities of Republicans, Democrats and independents. The actual sales tax is higher almost everywhere in California because municipalities have added their own increases over time.

Brown has said he included the sales tax increase partly as a way to demonstrate that all Californians would contribute to fixing the state's finances. Yet of all the questions in the poll, the backlash to a boost in the sales tax stood out to Baldasarre as having the greatest potential effect on Brown's ballot initiative.

"It's a big number," he said.

A potential competing tax initiative championed by the California Federation of Teachers and the Courage Campaign would raise taxes on incomes of $1 million or more to fund public schools and does not call for raising a broad-based levy such as the sales tax. Brown has been trying to persuade that group and others pursuing tax initiatives to drop their efforts and support his, although Tuesday's poll suggests a tax hike focused solely on the wealthy might be more palatable to voters.

Brown's spokesman, Gil Duran, responded to the poll results by saying the governor will present voters with a "clear and balanced choice" this fall and has fulfilled his pledge to produce honest budgets without accounting gimmicks.

"The governor's doing exactly what he said he would do, putting the state's house in fiscal order," Duran said.

The sentiment toward taxing the wealthy also showed in questions related to businesses.

Raising taxes on California corporations was supported by 61 percent of likely voters, a record high since the Public Policy Institute began asking the question in 2005. Among likely voters, 60 percent also favored altering Proposition 13, the 1978 initiative that reduced and capped property tax rates, so commercial properties would be assessed at current market levels. Such a change is referred to as a "split roll" because the limits would remain for residential property.

Baldassare said the support for raising taxes on the wealthiest Californians and on businesses could be attributed to a general feeling "that there are others out there that can afford tax increases."

 

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