Prop 30 and HSR Don’t Have Anything To Do With Each Other

Nov 3rd, 2012 | Posted by

Proposition 30 is one of the most important items on any ballot in the country this year. By taxing millionaires and by a small, temporary sales tax increase, California can save its schools and avoid further crippling austerity, which would be especially damaging as the state is now starting to see genuine economic recovery.

Prop 32: Muzzles for the middle class?

The right understands that they cannot defeat the proposition on its own merits – the public is more than willing to pay higher taxes for schools. So they’re instead attacking Prop 30 by other means. One of those avenues of attack is high speed rail. They don’t have anything to do with each other – even without HSR, California schools still face a multibillion dollar shortfall – but that isn’t stopping the haters.

Thing is, it’s quite transparent that the people making these attacks don’t support high speed rail at all. They’ve always opposed it. They can’t stand the fact that it passed at the ballot box and in the Legislature. So they’re trying to kill two birds with one stone, arguing that HSR is a reason to vote against Prop 30, and that if Prop 30 fails, it’s a sign that HSR should be defunded.

Here’s one such argument from longtime Republican operative Dan Schnur:

But while Brown has successfully convinced Californians that the schools are in need of additional funding, polling shows he has not yet convinced them that state government can be trusted to spend their tax dollars wisely. And that leaves Proposition 30 very much in doubt, with support falling off in recent weeks.

One reason might be that, despite all of the governor’s public parsimony, there is one highly visible spending spree supported by Brown: construction of the state’s proposed high-speed rail system….

Brown has little time. He needs to immediately move to convince voters that he is serious about putting the state’s fiscal house in order. One action the governor could take at this late date that might still be sufficiently dramatic to capture public attention would be for him to publicly announce that he is reversing his support for high-speed rail and to ask the Legislature to withdraw the funding it has allocated for the project pending a second public vote.

This is a deeply flawed analysis. First off, Prop 30 is neck and neck in the polls not because of HSR or concerns about government spending, but because of a reckless and destructive bit of friendly fire from ultra-wealthy political dilletante Molly Munger, who helped fund a series of anti-Prop 30 TV ads that pulled public support in the polls below the 50% mark. Munger has been backing a rival initiative, Prop 38, which has always trailed badly in the polls and has no real shot of winning. My own speculation has been that Munger wants to defeat Prop 30 because it would raise taxes on millionaires like herself, and her professed support for public schools is just a cover for that selfish interest.

Second, the public understands that government needs to spend money on important projects that can create lasting, long-term prosperity while saving money and addressing the climate crisis. Killing high speed rail would destroy jobs, reduce tax revenues, and by making California more deeply dependent on oil would mean long-term economic loss.

Finally, the math doesn’t add up. The state’s annual debt service on the high speed rail bonds is in the low hundreds of millions at best. Prop 30 would generate at least $6 billion a year for the state, according to the official fiscal analysis of the initiative. Even if Governor Brown was foolish enough to throw HSR to the wolves in hopes of passing Prop 30, it would do little to actually help the state’s finances while doing much to damage it over the long term.

Schnur isn’t the only HSR opponent to try and use Prop 30 to advance their anti-rail agenda. Morris Brown makes a similar argument at Fox and Hounds, but also reveals that even if HSR were dead, he’d still oppose Prop 30 anyway:

As previously reported in this blog and elsewhere, if you read Prop 30, you realize that Prop 30 doesn’t guarantee these new tax revenues will end up on the schools. Yes, that is what the Governor says will happen, but certainly not what is written in Prop 30.

Morris is lying here – money from Prop 30 is already budgeted for schools, so if it fails, that means an immediate cut to public schools. Teachers will be laid off, class sizes will rise. And because of Prop 98, any new revenues automatically go to schools, so those are two very firm guarantees that new money will indeed find their way into the classroom. The rest of his post is a rehash of the usual anti-HSR arguments, another attempt to link HSR and Prop 30 in the hopes that one or both proposals, essential to this state’s future, fail.

That’s the true lesson here. Those who oppose Prop 30 do so because they don’t want to do anything to make a better future for the people of California. That’s also true of those who oppose high speed rail. No wonder there’s so much overlap.

  1. joe
    Nov 3rd, 2012 at 16:47
    #1

    GOP is a party lead by grifters who are using Citizen’s UNited to generate personal wealth off their big and smal money contributors. Win or lose, they get paid for every media ad buy.

    Nationally, Obama’s ahead so the grifters concocted a “october surprise” excuse which is becoming Hurricane Sandy. Sandy is and why millions donated to these PACs will fail to unseat Obama.

    In CA the grifters that ruined the GOP have concocted a lie that links Prop 30 to the HSR project. All excuses for why rich should not be taxed and why money is not tight.

    GOP registration is now less than 30% of all CA voters. For on-line registration, SFGATE reports a majority are young and of all, 50% are Dem, 20% GOP and the remaining undeclared.

    GOP political operatives are running the party into the ground and making millions off the ads buys. The Mungers are marks. His and her bi-partisan consultants are fleecing them – it’s about the number of ads bought, not the issues.

    Jesse D. Reply:

    So you’re saying that the GOP caused Hurricane Sandy?

    Now, I may be an autistic gamer progressive Democrat neo-hippie, but…yeah, that’s some BS if I’ve ever heard it. I can believe the GOP is trying to screw Obama with PACs and PACs within PACs (it’s PACception! WE MUST GO DEEPER) but causing a disaster that’s basically taken out the Northeast and scared Governor Super Size Me into siding with Obama is not only bull, but it’s pretty much defeated its entire purpose.

    Now, the GOP trying to be the cow on the tracks in regards to HSR…that’s a different story entirely.

  2. synonymouse
    Nov 3rd, 2012 at 17:24
    #2

    Prop. 30 does tie in with the CHSRA because they are both the pet projects of the Brown regime. Sadly Jerry has gone over to the dark side. I mean the State government on his watch is being run for the primary benefit of the City and County of Los Angeles.

    It doesn’t really matter whether Prop. 30 prevails now or later as the die is cast. California has become a one party welfare state that due to inevitable monetary pressures will systematically trend ever towards more confiscatorial and unilateral.

    It is the Greece and Mezzogiorno of the day after tomorrow. Bankrupt like the former due to out of control spending and unions and, like the latter, inefficient, mismanaged, bureaucratically paralyzed due to the pervasive corruption of its politicians.

    Jerry Brown is too far gone to be able to re-think and re-compose hsr if the 30 fails. To celebrate his inevitable triumph he ought to bring on board Rose Pak as his consigliere, just to rub it in once again just how dim and obdurate he has become in his dotage.

    VBobier Reply:

    AB105(semi truck weight fees) pays for the high speed rail bonds, but of course You don’t care, You’d slander HSR no matter what.

    adirondacker12800 Reply:

    In nice round numbers 1 out of 4 Californians live in Los Angeles County. Why shouldn’t they have substantial say in how the state is run?

    synonymouse Reply:

    If we split the state then LaLa can have an even more substantial say, dictatorial is more like it. They would get 2 new senators – hell I would be glad to donate the 2 crones, even tho they reside in NorCal.

    I think the best description of LA would be a line from the Coasters’ great “Mother-in-Law”(1961):

    “Sent from down below”

    http://www.justsomelyrics.com/1352388/The-Coasters-Mother-In-Law-Lyrics

    VBobier Reply:

    Oh give it up, that has been proposed more than a few times and it’s gotten no where fast, but then that also requires the US Government, as no state can divide itself, by itself.

  3. morris brown
    Nov 3rd, 2012 at 17:51
    #3

    @Robert:

    I certainly don’t appreciate being characterized as a liar Robert. Put whatever spin on this you want, the fact of the matter is Prop 30 sends the money to the General fund and from there it can be spent as the Governor and the Legislature wish.

    Oh, yes the budget as presently written, says that some, even most of the funds will indeed go to education, but you surely know that a new vote is certainly possible and in my estimation likely, which would amend the budget.

    The example of Prop 1A and the appropriation passed in July is a perfect example of this.

    The Legislature in July specifically appropriated $1.2 from the $9 billion of possible Bonds funds from Prop 1A. This $9 billion pot of funds, is without any doubt mandated in Prop 1A, to be used for HSR construction (and planning). The allocation nevertheless, diverted this $1.2 billion to funding at the “bookends”, and proceeded to essentially let CalTrain and MetroLink (down south), decide how to spend these funds to modernize / improve their commuter / regional rail systems. The Authority even changed its propaganda to state that Prop 1A would provide funds for modernization / improvement of regional rail.

    Ah yes, the Governor and the Legislature can do what they want; the only recourse for those that want to enforce the law as written in Prop 1A, is through the courts.

    Let me lead you to a video wherein Democrat Assemblyman Jerry Hill tell his audience, that he didn’t vote in July for a $68 billion High Speed Rail project; no he voted to electrify CalTrain.

    ———–

    Link: http://youtu.be/dkJJrjgjuck

    (2 minutes)

    partial text of what he said…

    ….but where the miss understanding is, people think that the Legislature voted 68 billion dollars for a High Speed Rail system in June, where all they voted for was 4.6 billion dollars of bond money to be used in this area, this peninsula, and the region will get over a billion dollars of that money for electrification of CalTrain, positive train controls, get new Bart train, which has the oldest fleet in the country right now for public transit. So those are the opportunities we are going to get and Southern California will get the same public transit benefits and will be some in the valley. So there is no 68 billion dollar vote for High Speed Rail. And if there is one in the future it will have to stand on its own, and it will have to prove the utility independently of anything else to get my vote for High Speed Rail. I voted for the electrification of CalTrain and the guarantee in writing that it will be a 2 track blended system on the peninsula.

    ————

    If Prop 30 fails, be assured there will be gross changes in the trigger cuts. A very sensible change would be to kill off the July approved appropriation for the HSR boondoggle and use these saving for useful purposes.

    VBobier Reply:

    If prop 30 fails there will be no changes in the trigger cuts, it’s automatic HSR will not be affected. Otherwise drop dead.

    joe Reply:

    HSR is not going away if Prop 30 fails.

    Morris’ makes no economic sense. He knows prop1A funds are not re-allocatable to useful purposes.

    Cut the project to save interest payments on CA Prop1a cost sharing would be a net loss in tax revenue for 2013.

    HSR is billions in Fed dollars which are not loans, no interest due. The spending produces economic activity and new tax revenue. The jobs pull people off unemployment and put them to work, saving tax dollars as they become tax payers.

    VBobier Reply:

    Point is Morris et all don’t care, they have theirs and they want no new spending of any sort…

    Miles Bader Reply:

    I certainly don’t appreciate being characterized as a liar Robert

    Well then stop lying. Duh!

    joe Reply:

    …and Morris’ doesn’t want to fund the general fund – ever.
    The State Budget’s general fund is approved by a simple Majority vote.
    His politics are too unpopular to ever elect a majority and control the budget.
    The only recourse is to starve the State by obstructing taxes.

    If he wanted to reform the state he could ask that the extreme party compromise and draw more members, more voters and win elections.

    But why should Morris have to compromise? He’s an entitled man.

  4. John Nachtigall
    Nov 3rd, 2012 at 19:52
    #4

    Keep telling yourself they are not the same. It is a political argument now, not a logical one. When Prop 30 fails the Dems will need something to blame…and HSR is going to be target 1.

    And prop 30 is failing. It is below 50% in polling and no proposition much less tax increase has ever passed polling below 50% going into the vote.

    It was certainly not the plan, but it is going to kill 2 birds with 1 stone. Wave goodbye

    VBobier Reply:

    Teabagger lies.

    VBobier Reply:

    Rail bonds are paid for by Semi Truck Weight Fees, AB105

    1. Truck Weight Fees . Directs truck weight fee revenue,
    which totals approximately $900 million per year, to
    fund GO bond debt for transportation-related bonds and
    for loans to the General Fund. Over 2010-11 and
    2011-12, total General Fund relief is $1.6 billion.

    John Nachtigall Reply:

    You know why they call it the general fund? Because it is just 1 big pot of money that can be used on any (read general) expenses. Those truck fees are not dedicated to HSR, they could be used on eduction, jails, pensions, or even legislature aide raises.

    HSR has no dedicated funding source

    VBobier Reply:

    So You are calling what I linked to not a transportation project and by extension, Me, a Liar? Why You dirty SOB…

    John Nachtigall Reply:

    Re-up your meds and calm down

    The bill puts money in the general fund…it does not directly fund HSR

    Peter Reply:

    That was actually relatively tame for him. The best is after he gets drunk.

    joe Reply:

    But he’s right – HSR bonds MUST be paid back out of the general fund – They cannot be paid from operation revenue. An Oil extraction tax is another solution. Texas likes it and so does Alaska.

    The benefit for HSR construction is now, spending during a recession and high unemployment and low construction costs.

    Stimulus produces jobs – take people off state services and saves money – puts people to work paying taxes and offsetting the interest costs for the short term. I bet ther Combination of state and Fed stimulus and the economic multiplier for the jobs that produce will genrate more tax then the interest for CA’s share in the near term.

    The payback is later, when the economy is stronger, the interest rate is still low.

    StevieB Reply:

    California Republican Party dips below 30 percent is the most interesting development in the state. The secretary of state announced that Republicans now make up 29.3 percent of the state’s electorate, compared with 31.4 percent in 2008.

    This appears to be the lowest ebb for the party since records have been available.

    It is possible that Republicans in the state legislature could become as relevant as the Peace and Freedom party or the Libertarians.

    Eventually, the shifting partisan landscape could help Democrats win supermajorities in the Senate and Assembly, where a two-thirds vote threshold is needed to pass tax increases.

    The drop in Republicans is partially due to the new online registration system that went live in September. More than one million voters registered online and 49% registered Democrat compared to 19% Republican. This could affect the vote on Prop 30.

    The late surge in Democratic and independent voters could aid Gov. Jerry Brown’s Proposition 30 on the Nov. ballot, which would help close the state budget deficit by temporarily raising the state sales tax and income taxes on those making more than $250,000. Young voters are more likely to support it in part because it would temporarily halt college tuition hikes.

    Jesse D. Reply:

    So, how DOES the Kool-Aid taste, Mr. Nachtigall?

    No, really, I’m willing to bet you’re one of the first to blubber about HSR when all the stuff you don’t want to pass passes and all your buddies (Berryhill, Olsen, Denham) get booted the smeg out.

    Oh, and by the by, this whole Tea Party revolution thing? It’s a fad. Enjoy your sham of a political party. It’ll last about as long as you knowing who the Baha Men were.

  5. Stephen Smith
    Nov 3rd, 2012 at 23:26
    #5

    Those who oppose Prop 30 do so because they don’t want to do anything to make a better future for the people of California. That’s also true of those who oppose high speed rail.

    Why do you hate AmericaCalifornia??

  6. Eric M
    Nov 4th, 2012 at 08:21
    #6

    The problem is that California already spends over half of the general fund on education. While it has changed over time and changes somewhat from year-to-year, about 52 to 55 percent of the State General Fund Budget is spent on K–12 and Higher Education

    synonymouse Reply:

    You would have to take on the teachers union, which pretty much owns Brown, in concert with the prison guards union.

    Tom McNamara Reply:

    Actually, you have it backwards:

    When Proposition 13 first passed in 1978, the State had a large budget surplus and was all too willing to bail out local governments and school districts with General Fund monies. However, as population surged in the 1980s, the Howard Jarvis contingent realized that they might end up “shooting the moon” and forcing massive statewide tax increases to bail out the original bailout.

    Enter Prop 98, that effectively limited the growth of education spending on the General Fund side while doing nothing to manage population growth. Hence, once the stock market slowed down in 2000, the State had to choose between really draconian cuts, massive tax increases, or a sort of devolutionary strategy. Schwarzenegger refused to do anything until the end, which packaged cuts and a temporary tax increase. But when Brown tried to continue this along with “realignment”, he was told “no”.

    synonymouse Reply:

    Prop. 13 was necessary to put a choke collar on assessors. Without it ordinary people would not be able to have a house.

    The underlying problem is that California is over-populated.

    StevieB Reply:

    Prop. 13 was bankrolled by landlords and spearheaded by the Los Angeles Apartment Owners Association lobbyist Howard Jarvis. Wealthy landlords became richer. Prop. 13 has done more harm than good to California.

    Alon Levy Reply:

    Ordinary people should not own real estate.

    joe Reply:

    …or vote.

    You are so medieval.

    Alon Levy Reply:

    Not the same thing and you know it.

    But just for the sake of trolling, the developed country with (by far) the lowest home ownership rate was also the first continuously democratic republic.

    blankslate Reply:

    Iceland?

    Peter Reply:

    “Without it ordinary people would not be able to have a house.”

    Bullshit. It enabled those privileged few who owned houses when it was passed to remain in their houses indefinitely. In contrast, ordinary people looking for houses nowadays are finding it impossible to own houses in desirable locations, because the above-referenced privileged few have no incentive to sell.

    I’m curious how many neighborhoods have been neutered by Prop 13. I know my grandfather’s neighborhood has zero kids in it these days, it’s all retirees or childless tech yuppies now. So much for a vibrant neighborhood. On the other hand, I guess that type of neighborhood appeals to retirees and childless tech yuppies.

    blankslate Reply:

    Without it ordinary people would not be able to have a house.

    Ordinary people cannot buy houses in California today, and Prop 13 shoulders much of the blame.

    synonymouse Reply:

    Since the price collapse there are some ordinary people buying houses, but of course speculators with cash have the advantage. I assume plenty of overseas money.

    The forcedly political correct cannot handle the truth so carry on with the kumbaya.

  7. Paul Dyson
    Nov 4th, 2012 at 20:41
    #7

    It’s all connected.
    I am he as you are he as you are me and we are all together…..so who is the walrus?

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