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04
Feb 2013

The Orange Line That Separates Us

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Last summer, my youngest daughter and I huddled in the shade to find relief from Florida’s heat while waiting in a crowded line for a roller coaster. Next to us, separated by thick orange rope, was an empty lane for the “express pass” ticket holders — those who paid more than a 100% markup for the privilege of no lines for rides. Business Class for theme parks.

Despite the shade, I lost my cool, but no one else around me seemed fazed by the orange line at all. The ability to buy the rights to the front of the line seems normal to us now. We see it everywhere from the add-on airline fee that lets us board the plane earlier to the new High Occupancy Toll (HOT) lanes on Los Angeles’ 110 freeway. To economists, paying extra for privileges is an efficient way to distribute scarce goods based on the assumption that people are willing to pay for what they value. Unfortunately for the rest of us, these “Pay-for-Privilege” arrangements end up costing us far more than admission to a theme park.

If there was just one line for the ride, then it would have been ruled by the ethic of the queue, otherwise known as “wait your turn.” Here, what you want is doled out on a first come, first serve basis. The ethic of the queue is why my child feels compelled to scold classmates who cut in front of her in the lunch line. We all have to learn to wait our turn, because we are essentially the same. We are equal to each other.

The point of Pay-for-Privilege and the orange line is to establish an inequality. Defenders of the orange line will claim that paying for privileges is fair because the line doesn’t discriminate. Prices, they say, are neutral with respect to one’s race, gender, age, sexual orientation, etc. But neutral is not the same as equal.

Imagine applying the Pay-for-Privilege model in a school cafeteria – a special lane for students who, because they paid twice as much for their meal, are served sooner than the children paying the standard lunch fee. Are the children in the express pass lane simply hungrier than the other children, so much so that they want to pay extra for a quick meal? Maybe. But what if the same kids are in the express lane every day? How would you feel seeing the same kids jumping to the front of the line every day while you have to wait your turn? How does it shape your understanding of your value in the world in relationship to others? How does it shape their view of you?

Prices do more than just distribute goods and services; they also structure our relationships to each other. The Pay-for-Privilege model reinforces unequal relationships based on money and the other powers money buys. While this may be profitable for companies, Pay-for-Privilege is in conflict with a democracy built upon the ideal that we are all created equal. Not neutral, but equal.

I’m not advocating that we do away with prices altogether and just stand in line for everything. The orange line is a way to grab for more profits in a way that actually robs us of an opportunity to practice treating each other as equals by making everyone stand in the same line. After all, we’ve already paid the admission price. Businesses may not care what impact their pricing strategies have on cultural norms, or they may believe that express pass lines are inconsequential to equality and democracy, but they are wrong. The erosion of values doesn’t take place in one sudden event; it happens gradually over time, in increments too small to mind because we don’t pay it enough mind to begin with.

Standing in line builds patience and compassion, and the value of practicing patience and compassion will be evident when there is more at stake. I’d rather stand in one line where we can cultivate values that support equality than in two lines where “Pay-for-Privilege” divides those of us standing on either side of that bright orange line.

 

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Categories: Values
25
Oct 2012

Taxes vs. Bonds for California schools

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Funding for California schools is like the stacked-wood block-tower game, Jenga. Over the last thirty years, we pushed out blocks of money, leaving unfilled holes that destabilize schools. While the structures still stand, many educators and parents wonder whether the next block will be the one that topples public education.

Several blocks alone were pushed out by Prop 13, the 1978 voter-approved ballot initiative championed by right-wing, anti-tax zealots Howard Jarvis and Paul Gann. Not only did Prop 13 hollow out property tax revenues for schools, but it also created two-thirds supermajority requirements to raise taxes to fill those holes.

Stripped of realistic options for raising local revenues, school districts used bonds to shore up that leaning tower for the past two decades, because general obligation bonds only require a 55% majority of voters to pass (if it meets other requirements). Because bonds borrow their funds from wealthy investors, funds must be spent on projects that provide tangible collateral to secure the debt. In other words, it is easier in California to borrow from the wealthy than it is to tax them.

It is also more expensive. Poor credit ratings mean that Californians pay $2 for every $1 borrowed. The State budget includes nearly $7 billion annually in debt servicing, of which $2.6 billion is from school bonds. Meanwhile, blocks of funding for non-collateral expenses such as teachers, librarians, nurses, counselors and administrators continue to be pushed out of the tower because they can only be paid through taxes. Propositions 30 and 38 are attempts to fill some of those holes. Although insufficient, they are better than nothing. And they are cheaper.

One hundred six school districts in California have bond measures on this November’s ballot, including four local school districts — Temple City, Whittier City, Covina Valley and Rowland. They deserve serious consideration. As a parent and the former president of the Temple City Schools Foundation, I know first hand that our Measure S will put back a vital block of funding need to shore up our deteriorating school infrastructure. Plans include electrical upgrades, the removal of asbestos and lead paint, and improved heating and cooling systems. Each bond measure makes a worthwhile investment in local communities by local communities, just as the Pasadena Star-News’ October 15th endorsement indicates.

Bonds make sense as a way to finance expensive infrastructure projects over time without overburdening taxpayers with large lump sums. But bonds are inadequate building blocks to fund a statewide education system unless they are accompanied by sufficient general fund revenues. Restricting our investment in education to what wealthy bond investors need for collateral leaves our community’s children with new buildings but few people inside to support learning.

Education funding is incomplete without both taxes and bonds. Unlike Jenga, education is not a game that we can easily reset and rebuild when it topples. We must support both general fund tax increases for schools and bond measures in order to stabilize it.

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Categories: election 2012, Taxes Tags: , ,
20
Sep 2012

How Will Prop 30 and Prop 38 Affect Your Taxes?

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The answer is not a piece of cake, but if you are willing to dig in and digest it, you’ll be full of knowledge about taxes that many people don’t have.

Note: This is the second of a 2-part series on Prop 30 and Prop 38. The first one can be found here.

The 30-second Answer

Prop 30/Brown proposes a 0.25% increase in the sales tax which will be paid by everyone, plus a 1-3% increase in the Personal Income Tax for the highest income earners who comprise about 1% of personal income taxpayers. The majority of the revenue raised is expected to come from the Personal Income Tax.

Prop 38/Munger proposes a 0.4-2.2% increase in the Personal Income Tax for all but the lowest personal income taxpayers. While 60% of personal income taxpayers will be affected, the highest increases will be borne by the top 1% of personal income taxpayers.

Voters can approve both propositions, but legal, education and policy experts are predicting that only the proposition with the most votes will be enacted. Much of that decision will be in the hands of the courts, if it occurs. More information on what happens if both propositions are approved can be found here.

 

That’s the quick and factual answer to that question, but do you know what it really means? To really understand it, you need to spend a little more time with the details…

The 10-minute Answer

Do you really know how progressive income taxes work?

Most people don’t. And because we don’t, we can get really worked up and worried reading news about tax increases. Here’s a little video I did about how progressive income taxes work so that you will understand the implications of those facts.

Now that you’ve watched the video, let’s see if you can read these charts more easily. These are the proposed changes to California’s Personal Income Tax by Prop 30/Brown, followed by Prop 38/Munger, and provided by the California Legislative Analyst’s Office analyses of Prop 30 and Prop 38:

FAQs

Q: What’s the difference between regressive and progressive taxes?

A: Usually, we think of taxes in terms of the “chunk” they take out of a household’s income — the percentage of a family’s income that goes towards the tax. Regressive taxes would take a proportionately bigger chunk of a lower income family than a higher income one, thus making regressive taxes more burdensome on lower income families because they have less disposable income.

Progressive taxes take a bigger chunk out of a higher income family than a lower income family, which is less burdensome because a higher income family is better able to absorb the loss than a lower income family.

A simple rule of thumb to determine if a tax is regressive or progressive is to ask: “After the tax, are the families now closer together or farther apart economically?” Regressive taxes push families further apart because they create more economic inequality. Progressive taxes move them closer together by making the families more equal. See this post and this one for a more detailed discussion.

Q: I don’t want to support Prop 30/Brown because I think raising sales taxes is unfair. It’s too burdensome for people to pay a regressive tax right now.

A: Prop 30/Brown’s version of fair taxes in this case is to raise Personal Income Taxes on 1% of California tax filers and share the remainder of the burden with everyone through the sales tax.

Yes, sales taxes are a type of regressive tax. Prop 30/Brown proposes to temporarily raise the state sales tax by 0.25%. One positive aspect of sales taxes is that they are more stable than income taxes. In fact, the California Legislative Analyst’s Office says that the amount of money raised by Prop 30 or Prop 38 is hard to predict because it relies so much on the income tax, which is volatile and subject to the same swings as the stock market. Schools need stable funding sources to be successful, and a sales tax increase is one way to add stability to this funding stream for education.

Here is a breakdown of how much of Prop 30′s funds will come from the Personal Income Tax and the sales tax provided by the California Legislative Analyst’s Office:

Q: Am I going to have to pay higher income taxes because of these propositions?

A: That depends on your family’s income. The California Budget Project did an analysis of who would pay for the increases proposed in Prop 30 and found that the top 1% of earners ($533,00o or more) would pay 78.8% of the increase. That analysis also points out that 82% of the income gains over the last twenty years also went to the top 1% of earners in Califonia.

California Budget Project’s analysis of Prop 38 revealed that the top 20% of income earners in California would see most of the increases in their tax bills, with much of it for the top 1% of earners. Prop 38′s website has a special calculator that you can use to determine what the effect will be on your taxes if it is passed.

Q: Aren’t Californians are overtaxed? It feels like we pay some of the highest taxes in the country.

A: According to the California Budget Project, California is considered a moderate tax state. For some taxes, California is higher than other states, and in other cases lower. Here is a chart from that fact sheet for comparison:

Q: These propositions focus too much of their taxes on the high earners. Why should the most wealthy have to pay so much? That doesn’t seem fair.

A: Here is a chart from the California Budget Project which shows that low income families pay a greater share of their incomes in state and local property taxes than do the wealthiest. The absolute tax bill may sound like a large amount to pay in taxes, but the day-to-day impact of paying 7.4% in taxes on $2.3 million in income is different than paying 10.2% in taxes when you only earn $12,600 a year.

Fairness depends on how you look at it. The California Budget Project did an analysis that points out that 82% of the income gains over the last twenty years also went to the top 1% of earners in Califonia.

Q: What happened to all the other times voters approved ballot propositions to fix school funding like the lottery and Prop 98? Why are these propositions even necessary? And why are there two of them?

A: The lottery was not a quick fix for the schools as it only generates enough revenue for 2% of the education budget. Prop 98 was sold to voters as a minimum funding guarantee for the schools. Unfortunately, in practice it has become a maximum funding guarantee since the legislature has not funded it more than it is required to by law. More information on Prop 98 can be found in the links on this page.

These two propositions reflect schools’ fiscal situation in the current economy and budget crisis. Both have been brought to the voters as alternative plans for funding schools, because compromises could not be reached to combine them into one plan. They are not, however, competing with each other in that both can pass. If they should both pass, it is likely that only the one with the most votes would actually go into effect. For more detail on this scenario, please see my original Voter Guide post here.

Q: I’ve heard that Prop 38/Munger is a middle class tax hike. Is that true?

A: If you haven’t watched the video above, please do because this answer will make more sense to you afterwards. Prop 38 increases the marginal rates for all tax brackets except the lowest tax bracket. However, because of various deductions, credits and the progressive nature of the tax, middle income families are likely to see only a minor increase in their taxes. Most of the tax burden will be on the highest earners (the top 1%). Here’s a chart from the California Budget Project that shows the projected increase in the tax bill for various income levels:

This post is a follow-up to my original Voter Guide for Parents post which can be found here. Useful and informative links for Propositions 30 and 38 can be found here. Feel free to post questions in the comments section below.

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Categories: election 2012
05
Sep 2012

Prop 30 vs. Prop 38: A Voter Guide for Parents

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As a parent who volunteers in the schools and has learned the hard way just how complicated school finance is, I want to share my personal analysis of the two education initiatives on this November’s ballot — Prop 30 (a.k.a. Governor Brown’s Initiative) and Prop 38 (a.k.a. Molly Munger’s Initiative). If you need some basic background about each proposition, you can find good links at my “homework” post.

I based my analysis on one simple principle: Children should not be made to pay for the mistakes of grown-ups. With that in mind, this is what I decided.

Since parents are a busy bunch, I’ll give you my answers in three forms: the 15-second answer, the 1-minute answer, and the 3-minute answer (they build off each other, so read all the answers before it if you want the 3-minute answer).

The 15-second Answer

To make sure that schools don’t have to make do with billions less in funding, vote yes on BOTH Prop 30/Brown and Prop 38/Munger.

Prop 30/Brown needs to pass to prevent an additional $5 billion of cuts to education (the “trigger cuts”). Also vote yes on Prop 38/Munger as a safety net for education, because if Prop 30/Brown fails and the trigger cuts occur, Prop 38/Munger monies will still be available to help schools.

The 1-minute Answer

If both Prop 30/Brown and Prop 38/Munger pass, it is likely that only the one with the most votes will prevail, but that depends on how the courts interpret the law.

Prop 30/Brown is tied to the state budget, so in addition to education, your vote will also be helping to prevent millions in cuts to state universities and local governments that need the funds for law enforcement. Prop 30/Brown raises $6 billion in revenue each year from two temporary tax increases:

  • a 1/4 percent increase in the sales tax, which is paid by everybody, and
  • a small increase in the tax rate for incomes above $300,000/year.

In a situation where Prop 30/Brown fails, the trigger cuts will take effect whether or not Prop 38/Munger is passed. Therefore, a YES vote is needed on Prop 38/Munger as a safety net for education. Prop 38/Munger will make a projected $10 billion available for education and early childhood education programs such as Head Start. These funds may be used to replace funds lost by the trigger cuts. Prop 38/Munger also allocates funding to pay down bond debt; by paying down this debt, the State will have more General Funds available for use in the budget (not just restricted to schools).

Here is a chart showing what many experts think will happen under various voting scenarios:

 

The 3-minute Answer

A $5 billion cut to schools is scheduled to occur this year unless Prop 30/Brown is passed by voters this fall. This cut will mean even more teachers will be laid off, class sizes will grow larger, and parents will be asked to volunteer and donate even more than we already do.

Schools take the hardest hit in budget cuts because it is the largest part of the budget (41%) and it is one of the few parts of the budget the State can control. Here is a chart showing the “trigger cuts” that will be averted if Prop 30/Brown passes:

Source: LAO Analysis of Prop 30 (link can be found on “homework” post)

According to the Legislative Analyst’s Office (a nonpartisan office of the California Legislature that provides fiscal and policy analysis to legislators of all parties), the vast majority of Prop 30/Brown’s revenues will go primarily to pay the State’s existing obligations to schools since the State has accumulated $9.4 billion in late payments to school districts, a practice of both Democratic and Republican governors.

Therefore, if Prop 30 passes, per-pupil funding will essentially stay the same as it is now; but if it does not pass, per-pupil funding will fall by 6% from the 2011-12 level. In other words, if we vote for Prop 30/Brown and it passes, we can expect things to stay as they are, not necessarily get better. But we will prevent things from getting worse and protect our children from mistakes grown-ups have made.

Prop 38/Munger’s emphasis is more on boosting funding for schools, but it also includes elements that can help the state budget crisis generally. If passed, it would be in effect for twelve years. In the first four years, 60% of the Prop 38/Munger funds would go towards K-12 public schools, 10% to early childhood education, and 30% will go to pay back school bonds.

Prop 38/Munger is expected to raise $10 billion annually through raising the State’s Personal Income Tax for twelve years. The Legislative Analyst’s Office estimates that 60% of Personal Income Tax payers will be affected.

In conclusion, as a parent who cares about the education of our children, I want to be sure that schools have enough money to do their jobs and do them well. It is important for Prop 30 to pass because if it does not, the trigger cuts will go into effect. However, we also need to vote for Prop 38/Munger as a way to prevent education funding from falling dramatically.

 

FAQs about Prop 30 and Prop 38

 

Q: Our education system is broken. Why should we continue to pay for something that doesn’t work? If we stop paying for it, maybe the problem will get bad enough, they will eventually fix it.

A: While throwing money at a problem often doesn’t fix it, taking away billions of dollars isn’t any more likely to fix our education system either. In fact, it could make it worse:

  • Children/students will suffer the most from under-funding education. We need to minimize harm and damage to them while we fix the education system.
  • Withholding money to punish the system and correct it may backfire. Daniel Pink’s book Drive: The Surprising Truth About What Motivates Us shows how money is often ineffective as a “carrot” or “stick” to motivate people to solve complex problems and can actually “extinguish intrinsic motivation, diminish performance, crush creativity, and crowd out good behavior.” (p. 205) In other words, money used as an incentive or disincentive is more distracting and harmful than productive especially if the problem isn’t only about money.

So yes, let’s fix what’s wrong with our education system, including how we fund it, but let’s not do it on the backs of our children. Plus, by taking the fear of losing money off the table, we create better conditions for people to be able to work towards reasonable, rational solutions.

Q: Ballot initiatives are a bad way to legislate. I prefer to vote NO on all of them and put the responsibility back on our elected officials where it belongs.

A: I couldn’t agree more. Unfortunately, budgetary power has shifted from the legislature to the ballot box due to “supermajority” requirements for passing budgets (2/3 vote is needed instead of the usual 51% majority). Supermajority requirements allow minority parties to force concessions or stall budgets indefinitely. To get around these limits, elected officials increasingly have needed to use the ballot initiative instead of the usual legislative process. To learn more about this history, I highly recommend reading California Crack-up: How Reform Broke the Golden State and How We Can Fix It by Joe Mathews and Mark Paul.

So, Governor Brown has brought his budget plan directly to voters through the ballot initiative because he could not get enough Republicans to agree to tax increases. So while I don’t like these issues brought to voters either, the decision is in front of us anyway. And I don’t think our children should have to pay for the mistakes of a dysfunctional system. I believe that it is our responsibility to protect our children from harm while we adults work to fix the problems. So I will vote YES on both Prop 30 and Prop 38. And after November, it will be time to look at who is doing what for longer-term, structural changes in how California governs.

 

Q: How do these propositions address inequities in the public school system?

A: Prop 30/Brown contains no explicit language to address inequities in public school finance, an issue that California has frequently confronted over the years. It’s silence on this issue leads me to believe that it assumes inequities in school funding are already being addressed through other avenues.

Prop 38/Munger proposes a per-pupil allocation of funds that go to the specific school where the student is located. A portion of the funds will also be distributed as “low income student grants,” also on a per-pupil basis, as additional funds to the schools serving Title I students (Title I refers to the federal Free and Reduced Lunch Program and is often used as a proxy for low-income students).

Personally, I still think that resolving inequities in public school finance should be addressed by broader economic policies aimed at building the middle class and increasing upward mobility from low income families into the middle class, but those kind of policies are not addressed by these two propositions.

Q: Why does Prop 38/Munger use some of the funds to pay for school bonds?

A: The Prop 38/Munger proposal uses 30% of the annual funds raised until 2016-17 to go towards paying back school bonds. Bonds are a form of public borrowing, similar to a mortgage in that the State (with voter permission) borrows a large sum of money for infrastructure (such as a school building) that gets paid back over time.

The State’s General Obligation bonds still outstanding, which includes school bonds and other public infrastructure projects, is now $71 billion according to the State of California Debt Affordability report 2011. Debt servicing on those bonds, which is the amount of money we use from each year’s budget to pay back the borrowing plus interest, was estimated to be more than $7 billion this year. The portion of this debt servicing that comes from school bonds is $2.6 billion.

The faster we can pay back those loans, the less debt servicing has to be paid and the more we can free up general fund money to be available for other public priorities in the budget such as schools. According to the Legislative Analyst’s Office’s analysis of Prop 38, Prop 38/Munger is estimated to save the state $3 billion annually by paying for this debt servicing. These budget savings can then be used for any public priorities determined by the state legislature, including lessening the damage of the threatened trigger cuts.

This provision is one of the strongest points for me in supporting Prop 38/Munger. Unfortunately, Prop 38/Munger’s win may not be a good long-term solution for school funding in the way it hopes to be (see next question).

Q: There’s a lot in Prop 38/Munger for me to like as a parent: a bigger role for parent oversight, input and accountability and measurable student outcomes, and money going directly to schools instead of to Sacramento. In contrast, Prop 30/Brown feels like we are being threatened with cuts to give our support. Why are you advocating Prop 30/Brown as the one that is important to pass?

In all honesty, I find a lot to like in Prop 38/Munger, too. Here are my two concerns with it:

Prop 38/Munger is untested. Various education policy expert bloggers point to the difficulty of implementing Prop 38 if it should become law, because there is not enough language in the initiative to provide guidance in the execution. This could: a) make us lose precious time to get resources to schools, and/or b) become another Prop 98 quagmire. Prop 98 was a voter proposition passed in 1988 to guarantee a minimum funding level for schools, but it has morphed into a de facto maximum level of funding for schools as the State never provides more than it is required to by law. Also, Prop 98 has become a complex set of formulas and fixes to those formulas over the years. Without a solid, tested process, Prop 38 could become an additional layer of difficulty in education funding.

Prop 38/Munger follows a dangerous trend of separating education funding from the rest of the budget through a dedicated tax. Advocates of Prop 38 point to the separate fund that is created and overseen by a Fiscal Oversight Board made up of the State Controller, State Auditor, State Treasurer, Attorney General and Director of Finance — “untouched” by legislators. That’s another way of saying that it will not be subject to the democratic process.

While it may sound good to have a “protected” fund for schools, what happens in practice is if education has a separate fund to support it, our legislature will be tempted to continue to underfund education in the general budget and let Prop 98 and Prop 38/Munger take care of paying for education. When Prop 38/Munger expires in 12 years, it may be more difficult to pull those costs back into the state budget than it was to take them out. (Prop 63, the Mental Health Services Act, was an interesting example of this trend, and while it hasn’t yet become the sole source of mental health funding in California, it is moving in that direction. There is a good scholarly article about the dangers of dedicated taxes and Prop 63 here.)

So while I also like aspects of Prop 38/Munger’s proposal, I’m inclined to keep education funding in the hands of a democratically-run legislature where it belongs and not subject our children to being guinea pigs in a policy experiment that could lead to drastic cuts to schools down the road.

Q: Isn’t it okay if just Prop 38/Munger passes? Sure, the trigger cuts will go into effect, but won’t the schools have money from Prop 38/Munger to cover that $5 billion loss?

A: Schools will continue to receive funds, but it would not just be a matter of exchanging $5 billion in cuts with $5 billion in Prop 38/Munger revenues. For one thing, Prop 38/Munger’s 30% to bond repayment could generate some savings that can help make some of the trigger cuts unnecessary (LAO estimates $3 billion). Second, it is hard to predict how the legislature will act to fulfill its Prop 98 minimum funding guarantee to schools.

My primary concern is how Prop 38/Munger follows that trend of separating education funding from the rest of the budget through a dedicated tax (see answer to question just above this one).

Q: Are there any other unintended consequences we can foresee?

A: If Prop 30/Brown fails, the cuts to schools could be even worse than most people predict because the budget includes an option called “rebenching.”

If Prop 30/Brown doesn’t pass, the State budget says that it can push the costs of the $2.6 billion in debt servicing for school bonds into the complicated calculations for Prop 98, which was passed by the voters in 1988 to set a minimum level of funding for schools. In practice, Prop 98 has become a maximum funding level instead of a minimum.

Prop 98 has become a complex formula to determine school funding (see EdSource guide to Prop 98), but if the $2.6 billion in debt servicing for school bonds were added into it, the debt servicing is so large that it would effectively further reduce the amount available to give to schools.

Rebenching has serious enough consequences that the California School Boards Association has already sued the State over it. A judge ruled in June that rebenching was okay, so now CSBA is waiting for the election results before it appeals the decision.

For more information on rebenching, please read these blog posts by John Fensterwald that are wonky, but helpful:

You can submit other questions to me through the comments section below. My post that takes a closer look at the two propositions’ tax proposals can be found here.

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Categories: election 2012
30
Aug 2012

Have You Done Your Homework on Prop 30 and Prop 38?

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Here’s some links to where you can find some good factual summaries of the two education ballot initiatives and links to original source documents. Since this voter guide is my personal opinion and analysis, and you should balance it out by educating yourself on these basics. My posts will assume that you are familiar with the two cheat sheets and the two-page summary from EdSource; the rest is just for you to read if you feel so inclined.

If you feel overwhelmed as you go through the research, just know that you are not alone. Understanding how schools are financed in California is as hard as policy gets. Just take a peek at EdSource’s glossary of terms; it’s incredible.

So here’s my caveat: As I post to this voter guide series, know that like you I am a mere mortal trying to understand this stuff. Let’s get through it together. If we disagree or if you find other credible information that contradicts what I say, then let’s share it with each other in the spirit of fellow explorers in unknown territory. We will be more likely to get through to the other side by working together.

Mandatory Reading

There are many out there, but here are wo good cheat sheets by KCET, plus a look at what happens if they both pass:

A two-page summary of the basics of California Schools Finance System by EdSource

Optional Reading

The official text of the ballot measures:

The Legislative Analysts Office analysis of the ballot measures:

A one-page fact sheet about Prop 98 which was passed by voters in 1988 and is used to determine 70% of school funding:
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Categories: election 2012
23
Aug 2012

Voter Guide for California Proposition 30 and Proposition 38

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Do you want to support the local public schools in this next election?

How will you know which California proposition to vote for?

There is a lot at stake for our schools in California’s November ballot. But finding a source of information I can trust is really hard. Usually, I’m too busy to do the research necessary and so I rely on voter guides. But not this year.

This time, I’m going to read and analyze the ballot initiatives myself, and I’ll share what I learn with you here because I know you are busy and care about the schools, too.

My Voter Guide for Parents is now published. Go here for some important links and background reading or here for the Voter Guide itself.

 

Why I am doing this guide

I’m tired of constantly fundraising for the schools to fix budget crises. I just spent two exhausting years trying to raise money for my children’s public school district, and despite doing okay with the donations, we were only able to contribute about 0.4% of the budget. Yes, less than half a percent. Those donations were hard-earned drops in a large, leaky budget. After a while, spending ten to fifteen volunteer hours a week fundraising for less than half a percent felt futile, no matter how noble or personal the cause.

This November, voters have an opportunity to make a bigger impact on school budgets than all our gift wrap, cookie dough and car washes could ever have. There are two initiatives on California’s ballot to fund public schools: Proposition 30 (a.k.a. the Governor’s proposal) and Proposition 38 (a.k.a. Molly Munger’s proposal). But which one to pick? What happens if we vote for both? What happens if we vote for neither?

How this guide will differ from others out there

This series of blog posts will examine these propositions from a different perspective than what is in a typical voter guide. Some voter guides take a neutral stance and provide short pros and cons or summaries of what the competing sides say about the propositions. I like that they are letting me make up my own mind, but usually, these guides are so neutral that I don’t actually learn what what I want to know:  how does this proposition compare to my values and what I believe? There isn’t always enough detail for me to know.

Other voter guides assume that my support for their political party or organization means I agree with their take on all other issues. I don’t. I have my own brain and my own values. We don’t see everything the same way just because we belong to the same political party.

So, my aim in this upcoming series of blog posts will be to uncover some of the values-based assumptions that are imbedded in the propositions and provide questions that we can ask ourselves and each other to help us get to our own decisions. To me, the process of coming to our decision is just as or even more valuable than the vote itself. These blog posts will be a resource for you in that process.

What sources will be used

I will use the official text of the initiatives. Since I am not a lawyer, only a mere mortal, I will also look at analyses from the Legislative Analysts Office (a nonpartisan government department that provides policy analysis for our state legislators and the public), EdSource (a nonprofit, nonpartisan organization that is a clearinghouse of information and data on California education), and the California Budget Project (another nonpartisan nonprofit organization) to help me understand the initiatives better.

My hopes for you

Voting is the crudest form of democracy there is. It collapses a diverse and complicated set of thoughts, feelings, perceptions, attitudes and realities into one either/or decision, aggregates them, and makes everyone live by the result. It might not be so bad if there was widespread, civil discussion that preceded voting, but we hardly have any practice with deliberation or forums for doing it.

I want to bring back a depth and richness of thought and consideration into economic policy, and I want everyone to have the information and skills to be able to participate in it. I hope that by focusing on this one decision we have to make that you will get a taste of this deeper, more substantive, deliberative democracy that I want for us and be inspired to ask the questions and talk about it with others.

You can join me by subscribing to the blog posts in the sidebar, following me on Twitter or liking my Facebook page.

 

My Voter Guide for Parents is now published. Go here for some important links and background reading or here for the Voter Guide itself.

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Categories: election 2012
20
Feb 2012

Philanthropy’s Highest Potential is to Disappear

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Philanthropy may be defined ideally as “love of humanity,” but philanthropy as we know it is a perfect microcosm of our modern American capitalist economy:

  1. There is fierce competition for scarce resources (“This rejection of your proposal is not a reflection of the worthiness of your project.”).
  2. A person’s worth is determined by their wealth (“We need a new board member. Do you know any rich people? Specifically, ethnic rich people?”).
  3. We think we can buy social good (“To receive your grant, please sign and return this grant contract.”). Plus, we think we can get it on sale (“Administrative and fundraising expenses are not to exceed 5% of total budget”). And even off the rack (“Let’s replicate the model nationally”). Maybe throw in a money-back guarantee (“We only support evidence-based practices.”).

Philanthropy as we know it has done a great job in becoming an indipensible part of our economic system by helping people feel comfortable with and even good about grossly inequitable distributions of wealth and power. Without scarcity in one corner and extreme wealth in the other, who needs philanthropy?

What if many of the social problems we face today, which philanthropy as we know it aims to mitigate or solve, have roots in the way our economy treats people? Maybe, equality between people can only be achieved once there is also some level of economic equity between us. What if peace between people and nations requires a more equitable global distribution of wealth?

What if we have to think outside of the current economic system that gave birth to philanthropy as we know it in order for philanthropy to achieve its highest potential?

So let’s try this: take a deep breath and relax. What could philanthropy look like in a world where everybody already has enough?

When I ponder this question, I see a world with an economic system that supports people’s inclinations to:

  • Give generously.
  • Receive graciously.
  • Reciprocate frequently.

When I imagine an economy in a world where we all have enough, we give generously. I see people who give freely without strings attached. There is no fear of it going to waste, no worry that a precious resource might be squandered. We can do this because we trust that what is given will be returned in some form, which frees us to be generous because we never give away — we only give, and what we give grows.

When I imagine an economy in a world where we all have enough, we receive graciously. I see people who know how to receive. They recognize the gift that has been given, and there is no shame attached to receiving because we know that we all receive in one form or another. The recognition of need is simply an act of humility, not a sign of weakness. Seen this way, we can be gracious — especially because we know that all of us have something important to give, and we are always asked to do that.

When I imagine an economy in a world where we all have enough, we reciprocate frequently. I see a whole network of people giving and receiving just what is needed and called for at any particular time. Lynne Twist calls this state “sufficiency.” Just enough, no more, no less. It’s a principle around which we can construct relationships that allow us to care for each other. After all, economics is really about how we decide to structure relationships between people. We could design a system that acknowledges a radical truth — that we are equal and interdependent — and in so doing, obliterate philanthropy.

  • Give generously.
  • Receive graciously.
  • Reciprocate frequently.

An economy built on these principles doesn’t need philanthropy as we know it. It would already express our love of humanity.

 

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This post was also published at Creating the Future.org on its Philanthropy Blog.

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Categories: Philanthropy
11
Jan 2012

Think Like a Family

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President Obama’s current appeals to fairness — as in the wealthy paying their “fair share” and letting ordinary Americans have a “fair shot” at a middle class life — will likely do more harm than good for those of us who care about economic equality. A Gallup poll conducted in mid-December reports that 58% of Americans polled say that they do not see society divided into “haves” and “have nots” despite Occupy Wall Street’s efforts to highlight growing economic inequality. The references to fairness appear to be the Democrats’ attempt to capitalize on the rhethoric of the 99%, a tactic they should seriously reconsider as it will likely backfire with serious consequences to our nation.

Fairness is inevitably in the eyes of the beholder. In the President’s stump speeches, “fair” seems intentionally ambiguous, a political Rorschach inkblot test to align people behind broad political assumptions than an actual signal of agreement about what would create a level playing field in a today’s economy. The rhetoric of fairness divides people into beneficiaries of unjust policies or victims of them, without delving deeper into what actually unites and benefits everyone.

If the President and the Democrats actually want a more equitable distribution of wealth, then they should pretend they are managing a household or large family, rather than running a business. The responsibility of managing a family household includes more than just making sure that there is money to pay expenses. It also means caring for everyone in it with whatever resources you do have. It requires us to distribute and share our household’s resources in a way that makes it possible for the needs of individual members as well as the needs of the whole household to be met. The balance between the needs of individuals and the whole is necessary, because how we distribute the family’s resources has direct impact on the quality of how we relate to each other. Competition makes for tense family relations. Similarly, in a family it is hard to imagine tolerating a situation where some family members suffer without basic needs being met while others have plenty. When we live under the same roof, it is clear that our own wellbeing is intimately connected to the wellbeing of everyone else in household.

This dynamic of being interconnected and interdependent needs to drive political discourse and policy as well. Economic policies organize relationships between people in society. When we distribute resources — whether food, electricity or Social Security benefits — we create relationships between people.  The ways in which both private wealth and public goods are distributed translate into the neighbors we have, the local businesses available in our neighborhoods and the quality of the schools our kids attend. In the academic world, economics may be about the distribution of scarce resources; but in the real world, economics is a *system of relationships* created by the distribution of resources. And it’s the quality of our relationships that lie beneath discussions about economic inequality. The relevant question is not “what is fair?” but rather “what economic relationships make it possible for us to get along and live together in peace?”

How we get along may seem irrelevant, idealistic or even naive given the ascerbic tone of today’s political discussions, but the quality of our relationships couldn’t be more important. Almost a hundred years ago, we had similar gaps between the wealthy and everyone else. Such inequities gave rise to violent labor protests and reform movements. While the ultimate ends of those social justice movements were laudable, violence in any form is costly and should be prevented.

Another recent Gallup poll cites that the vast majority of Americans believe we should focus on economic growth instead of closing the wealth gap. Unfortunately, that economic growth may be a long time in coming, given Japan’s decades-long recession-turned-depression and the foreboding economic chaos in Europe. Right now and for the long haul, we need economic policies that will help us live together peacefully regardless of whether the economy is booming or busting.

During hard times, families find ways to put aside differences, band together and support each other. When they do, they are able to tap into a resiliency that can withstand and outlast hardship. We rarely consider everyone in the country to be part of a common household, but what would it make possible if we did? What would we do differently if we took that responsibility seriously? Rather than using the rhetoric of “fairness” to pit people against each other, the President and other policy makers would do well to remember that economic policies create more than just wealth — they create relationships. And there are some relationships that will withstand economic hardship better than others.

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Categories: election 2012, Great Recession, Wealth Distribution Tags: , , , ,
31
Dec 2011

Where to Find Financial Security

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I grew up with the expectation that I should strive to financially support myself and my family all by myself, regardless of what my partner might earn. Why? Death, divorce, disability, disease, you name it. Life is risky. Anything can happen and often does. My work ethic was my personal safety net to insure me against potential financial disaster. I thought as long as I could work, I would be safe.

And then one day, I couldn’t work anymore. Poor health and severe post-partum depression set in after my daughter was born, and I left the workforce to care for myself and my new baby. When I suddenly realized I no longer had the self-sufficiency that working meant to me, my depression deepened. I felt helpless without a means of earning money. I hated depending on anybody, and my stress compounded with financial insecurity.

In truth, I wasn’t financially insecure at all. I was actually deeply supported by my husband, family, friends and collegues. I had a spouse with a job, some savings, maternity leave and COBRA health insurance. Those people and resources helped me get better, and two years later I joined the workforce again.

Here’s what I learned from that experience: When I thought what I needed was more cash, what I really sought was freedom from financial anxiety. I didn’t want to worry about if we were going to have enough to pay the rent just because I couldn’t pull my weight at the moment, but I also thought that caring for myself was a luxury I could not afford. What turned the dial down on my financial fear and worry was recognizing that I was part of a community that was not going to let me fall through the cracks. It turns out that my  self-sufficiency — my confidence in my own resourcefulness to be able to care for myself and family  – had a limit, and that limit was me. My bootstraps could only pull me up so far. To transcend the limits of my self, I needed to see that I was connected to and supported by others — even financially.

It turns out that even people who do have ample bank accounts feel financially insecure. A study from early 2011 by Boston College’s Center on Wealth and Philanthropy found that even the super rich “still do not consider themselves financially secure; for that, they say, they would require on average one-quarter more wealth than they currently possess.” The average net worth of the people in this study was $78 million. If $78 million didn’t make someone feel financially secure, then what would?

Our instinct in times of financial hardship is to narrow our focus to the survival of ourselves or our family. Unfortunately, it also ends up narrowing our focus of solutions to what we can do all by ourselves: cut expenses or increase income. Ironically, what creates the financial security and financial wellbeing that we actually seek lies outside the small, narrow focus in the larger networks of communities. With more resources to access, there is also more flexibility in how to respond.

But right now, our communities and governments are going through the same downward spiral of scarcity, cost-cutting and income-raising dilemmas we have at home. This is the time  to make investments in our capacity to support each other. Instead of debating what to cut and who to tax, we can ask ourselves:

  • How would we feel if we knew that the community supporting us was as big as a town, city, nation or a continent?
  • What would we do differently if we knew that our basic financial needs would be met through our community networks and supports when we hit rough spots such as unemployment, caring for sick family members, our own ill health?
  • What government policies can create the conditions in which we will feel supported by the financial strength of an entire community until we can regain our self-sufficiency?
  • What can we do now to dial down our collective financial fears? Who needs to be involved and how?

I’m not suggesting that we don’t need to cut expenses or raise taxes, but those are actions that need to be taken in the context of a vision we are trying to achieve. We are a country of unquestionable, tremendous wealth, and that wealth was supposed to be a proxy for financial security. But none of us feel financially secure, even if we have the wealth. If having the wealth doesn’t do it, then what would actually free us from financial fear?

Here are two things we can do with public policies to create conditions that lessen financial fear and increase our overall financial security:

  • Narrow the bandwidth for wealth– The wider the gap in wealth, the more room there is for comparison and stronger feelings of financial inadequacy. It’s like trying to keep up with the Joneses but always failing because there will forever be someone with (lots) more money than you. The more narrow the room for comparison, the less inadequate we feel. Plus, when we narrow the bandwidth, the fall from fiscal grace is shorter and the climb back up not so steep. Policies that narrow income and wealth gaps (such as progressive taxation) can do this.
  • Fulfill universal needs without contingencies for income — Our need to be able to care for each other is universal, not limited to those at the poverty line. If the need is universal, then so should be the program. Designing policies that help anyone who needs it, not just those who fall below certain income thresholds, creates a public good for everyone even though it will only be used by those who need it when they need it. One existing example is the Family and Medical Leave Act which requires employers of a certain size to offer unpaid leave to workers caring for new or ailing family members. Workers are eligible regardless of their income, and while anyone can envision a situation where they might need to use it, only some will need to at any given time. Strengthening this program allows us to focus on supporting the people who support others in need, so that there isn’t a competition between income and care. It supports a community’s ability to care for itself.

Maybe our government solutions to provide income supports (such as unemployment or welfare) have been incomplete in part because of our focus on getting individuals back on their feet. Investments in the community’s capacity to care for each other could top off those efforts, because it’s the supportive relationships that will give us the financial security we truly seek.

 

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Note: This is the last in a series on financial wellbeing. You can read the other posts in the series here, here and here.

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Categories: Government, Taxes, wellbeing Tags: , , , ,
04
Oct 2011

Philanthropy: “Take, then give.”

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We’ve built an entire industry around giving and called it the philanthropic sector — and by this I’m referring to the institutional foundations like Ford, Carnegie, and Gates that represent the largess made possible by corporate profits, and then the nonprofit organizations that receive those funds and who work to mitigate the ill effects of poverty. Structured into the philanthropic sector is the inequitable distribution of wealth and power to create the necessary supply of capital (excess money available to make donations) and the demand for it (social problems created by that inequality). In other words, economic inequity and injustice are built into philanthropy itself. For the institution of philanthropy to survive, economic inequality must exist. Think about it: if we didn’t have an economic underclass in one corner and extreme wealth in the other, would we even need philanthropy?

Many philanthropists and those in the sector care deeply about finding solutions to poverty and other inequities. I’m not really criticizing people — I’m looking at the systems in which people find themselves and creates a kind of architecture through which much of their impact is constrained. If we were interested in building an economy grounded in sufficiency rather than maintaining an economy that creates scarcity to keep itself going, philanthropy would need to be different. Can we create a system that truly harnesses our inherent generosity without needing to create poverty and scarcity as a motivation? What would need to be different about the philanthropic sector?

What does philanthropy look like in a world where everybody already has enough?

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Categories: Philanthropy Tags: , , , ,
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