By Juan G., Andy Libson, and Blanca M.
What is Prop. 30?
Proposition 30 is a sales and income tax initiative on the ballot for Nov. 2012 which is promoted by Gov. Brown and will raise between $7 and $9 billion for the general fund of the state. It proposes:
– a temporary (4 years) raise of California’s sales tax from 7.25% to 7.5% , a 3.45% percentage increase over current law.
– a temporary raise (7 years) of income tax for taxpayers with taxable incomes exceeding $250,000 (1%: from 9.3% to 10.3%), $300,000 (2%: from 9.3% to 11.3%), $500,000 (3% rom 9.3% to 12.3%) and $1,000,000 (4%: from 9.3% to 13.3%).
– These revenues would be available to (1) pay for the state’s school and community college funding requirements (89% to K-12 schools and 11% to community colleges), as increased by this measure, and (2) address the state’s budgetary problem by paying for other spending commitments.
Where did Prop. 30 come from?
Since December 2011, Gov. Brown has been campaigning for the California’s Tax Initiative that consisted of a sales tax and income tax increase to fix the budget. He never hid his goals: “What I propose will be painful, it is going to take sacrifice from every sector of California”. That budget proposal combined 0.5% sales tax increase with an income tax increase on income earners exceeding $250,000. At the time, many progressives rejected his initiative as a classic case of ‘shared sacrifice’ and criticized Brown’s initiative as punishing the poor with a sales tax increase in a state which already has the highest sales tax in the nation. This large sales tax creates a situation in CA where the poorest 20% actually see over 11% of their income consumed by sales and income taxes while the top 20% see just 7.4% loss in income.
It was also clear that the revenue raised by the initiative (projected at $6.5 billion) was insufficient to cover the projected $9 billion budget deficit and that cuts would still be coming despite the initiative. For students, labor activists and progressives, Brown’s message was clear: working people must continue to pay for a crisis they did not create, and the needs to balance the state budget must come before the needs of the people, while politicians in Sacramento will continue to use cuts to vital social services as a way to balance that budget.
Last year, in the context of the national Occupy Movement which was independent of the two parties of big business, we rejected the ‘shared sacrifice’ and demanded that the rich and corporations pay for their crisis. A new political initiative emerged called the Millionaires Tax (MT). This initiative was spearheaded by the California Federation of Teachers (CFT) and supported by many unions across the state (SEIU 1021, UAW 2865, CAN, UESF, UTLA and others) and became the rallying point for Occupy activists across California, including the Refund California Coalition and Occupy Education.
What was the Millionaires Tax?
The Millionaires’ Tax had 3 distinct characteristics:
1) It rejected the current rhetoric of “shared pain” upheld by the two parties and proposed to “Make the 1% pay” by permanently increasing income tax for the millionaires in the state of California:
• Added 3% to California’s personal income tax rate on annual earnings over $1,000,000.
• Added 5% to California’s personal income tax rate on annual earnings over $2,000,000.
2) It allocated money specifically to the broad set of social service needs and avoided putting it in the hands of Sacramento. Its proposal for the general fund allocated:
• 36% for K-12 schools
• 24% for public colleges and universities
• 25% for services to children and senior citizens
• 10% for public safety
• 5% for road and bridge maintenance.
3) It was politically independent of the two corporate parties and linked organizationally and politically to the Occupy movement. Within labor, it was a rallying cry for a fighting and independent labor movement. While the most conservative sections of the labor movement (such as CTA) were supporting Brown’s initiative of shared sacrifice and continued austerity, left-wing forces within labor, particularly the newly elected leadership within CFT, were striking a more militant, independent course.
In the context of the Occupy movement attacked by police repression and co-optation (almost entirely the result of Democratic Party officials), the value of the MT was clear. In the context of the upcoming electoral period, the Democrats were posing as the only viable alternative for workers, while simultaneously arguing for ‘shared sacrifice’ and more austerity. Their purpose was clear: to lower the political horizons of the Occupy movement, to make it get off the streets and dump itself safely into the ballot box.
Against this backdrop, the MT was both a ray of hope for the Occupy movement to rally around through the election season and the first building block of an alternative economic policy. It posed an important political alternative to workers: make the 1% pay, not the 99%.
Prop. 30 : Compromise or Co-optation?
The Democratic Party, many NGOs and labor leaders are presenting Prop. 30 as the result of a compromise on the MT, that is to say as a new version of the MT, that we should support because it has real chances of winning.
For us, Prop. 30’s has little in common with the MT and is essentially a product of Brown’s original tax initiative that so many progressives rightly rejected at the time. Virtually, every single political feature of the MT that made it worth supporting has been stripped away (except the tax increase on the wealthy), and every political feature of Brown’s original tax initiative that made it worth rejecting has been preserved. The MT taxes only the rich, while Prop 30 taxes also the 99%. The MT was a product of the Occupy Movement and an independent labor movement, while Prop 30 is a product of Brown’s political interests. The MT was money directed to a broad set of social needs, while (at best) Prop. 30 narrowly directs money to K-12 and Community Colleges.
In reality, the initiative’s language on where the new revenue is going to be spent is at best ambiguous and at worst purposefully misleading. Prop. 30 is being deceptively billed as raising money overwhelmingly for education but liberal columnist George Skelton (who actually says he will be voting for Prop. 30 despite its problems) writes “Brown wants voters to believe that all the billions raised by his tax hike would go to K-12 schools and community colleges. They won’t. And he knows that as well as anyone.”
One of the biggest political victories of Brown in defeating the MT is the fact that he (and the Democratic Party-controlled State Congress) can directly control the use of the monies through the general fund. Brown maintains that his biggest priority for the revenue raised is to pay down the debt. What does this mean? In plain language it means Sacramento will use the money raised by Prop. 30 to repay the public debt to the banks. Does that sound familiar?
The reality is that Prop. 30 is not really a compromise of the MT, but a co-optation of it and of the political movement which gave it life. Of course the Democratic Party and the union leaders who cut the deal would like us to believe differently, but what happened is not that Brown and the Democrats moved over to our positions, but that the leadership of our movement moved over to Brown’s original proposal: sales tax, more cuts, shared pain and submission to the Democratic Party to get us to pay for the crisis. The question is who compromised with whom? Who gave up their political strategy to get out of the crisis? Not the Democrats. We did.
But the pragmatists say…
But a pragmatist could say: “well, now that we lost our chance to have a viable alternative to begin to get out of the crisis and reverse the situation, shouldn’t we support the initiative that is nonetheless going to ‘raise’ (even if partially from our own pockets) $8 billion to avoid more cuts?”
Even if one was willing to abandon the political principles that animated the Occupy Movement for being “realistic,” the question remains. Will Prop. 30 save us from the cuts? Will it avoid new cuts or reduce them? Let’s talk about reality.
The answer is… no and no. As soon as the MT was defeated and the ink barely dried on what was to become Proposition 30, Sacramento announced more cuts and declared that “state spending is now at its lowest level in decades,” adding: “Now we are facing a $17 billion hole, not the $9 billion we thought in January. This means that we will have to go far further and make cuts far greater.”
That is to say, after Brown managed to co-opt the independent initiative to tax the rich (MT), he announced “oops, the money that Prop. 30 will raise is already gone, because there is an ‘additional’ $8 billion more deficit,” and he has since then already signed in $6 billion more in cuts if Prop 30 fails, what we call “Trigger Cuts.” This “revised” budget deficit means that, even if Prop 30 passes, Brown is still tasked to cover the gap with his favorite weapon of public worker layoffs, cuts to pensions, and the gutting of education and social services. Something that is never emphasized in the actual content of the budget proposal of Brown, leaving aside the impact of Prop 30: cuts to pensions and to public worker wages.
What is Prop. 30 asking us to do from a “pragmatic” point of view? It is asking us to accept that the Governor can make cuts and decide the budget without oversight or consultation with California workers directly affected by the cuts. Proposition 30 promises that regardless of how we vote, more cuts are coming, but that if we do not support it, more and more cuts will come. It is an unprecedented case of blackmail: vote for it and pay for it or we will cut deeper. In either case, from a “pragmatic” point of view, we lose what we wanted to preserve — our schools, universities, social services and jobs. Let’s be realistic. Proposition 30 represents the Occupy Movement abandoning virtually all of its political ideals, while not adding a dime to social services. Money for the banks to repay state debt, and California workers paying for it while scratching their heads wondering where the Occupy Movement went. This is the fate of all social movements that give up their independence and wither away inside the Democratic Party.
“Balancing the budget”: the Rhetoric of Austerity to Hide the Origins of the Crisis
Prop. 30 is in many ways the tree that hides the forest, because to accept it is to 1) accept Brown’s budget proposal and his plan to cut social services and 2) accept that balancing the budget should be our priority over providing social services, education and creating jobs.
Brown’s budget is continuing ruthless attacks on public workers in California. Last May, Brown cut public workers’ wages by 5%. This cut comes in the wake of a 2009 wage cut of 18%. On Sep. 13th, Brown approved what he called “the biggest pension reform ever in the history of the California pension system” that included: a retirement age increase from 55 to 67, workers paying at least half of the cost of their benefits and new workers being forced to take unstable 401(K) retirement plans. The Brown administration is saying that this reform will save up to $55 billion over 30 years. That is money out of our future and our children’s future to pay off state debt to the banks.
To accept that our priority should be to “balance the budget,” i.e. to diminish the State debt towards the banks, means that we should prioritize paying back the 1% who caused the crisis, over providing good social services and creating jobs for the 99%. This is the implicit framing of Romney, Obama and Brown, and as soon as we accept this political framing that prioritizes making us pay for the crisis and paying back the banks so they can go back to business, we are losing. This is where pragmatism comes short: it does not question the priorities that are being set for us. If this crisis is one caused by the capitalists, they should pay for it. The banks and big corporations should fix the problems they are causing. They should pay for education, healthcare and jobs.
Ironically, Brown is being honest when he confesses, “We’re taking as bold a step as the process would allow.” The “process” here is Sacramento running
The Rhetoric of Blackmail: Trigger Cut Deals and Shared Sacrifice
Governor Brown has therefore managed a pretty ingenious move to continue cuts and austerity using Prop. 30 as a Trojan horse to force unions to accept trigger cuts and force them to campaign for his initiative. This is from the same man who as Mayor of Oakland closed public schools, opened charter and military schools, laid off workers and raised student fees. With Proposition 30, he has managed to appear as an ally to workers, while accelerating the
Brown is saying to workers with Proposition 30, “I will not actually increase spending for anything that you need, but if you do not support me politically, I will cut public education even worse.” This is not a political official doing us a favor. This is political blackmail. The rhetoric of blackmail is not only a cynical ploy to stampede workers into holding their nose and supporting the Democratic Party. Proposition 30 is consciously being used by Brown to inhibit mobilizations in the streets, unions and campuses. He is trying to herd workers into the electoral arena and avoid any possible bursts of struggles like the Occupy protests of last year or strikes, like the one staged by the Chicago teachers.
He has been very successful in this, and labor has followed him over the cliff. To date, education unions across the state from San Diego to LA to San Francisco have settled concessionary contracts that accept the need to make concessions now in the form of furloughs, worse working conditions, and less services for students. The fact that all of these unions did this without a struggle (only UESF hinted at a strike) is bad enough. Worse, all of these unions have agreed to clauses in their contract which allow school districts to impose a massive amount of furlough days if Prop. 30 does not pass. In the case of UESF, they accepted up to 16.5 additional furlough days over two years if Prop. 30 does not pass. Contracts in UTLA and SDEU propose similar drastic measures. These trigger cuts agreed to by unions have been facilitated by politicians in Sacramento changing the minimum number of days students must be in School from 180 to 160.
This change highlights several developments. 1) Sacramento politicians (led by the Democratic Party) are committed to dismantling public education. 2) California workers will be asked to bear the day care costs and are being pushed to accept private schools and charters which promise longer school years. 3) Education unions see Brown as a political ally in this process and have joined him in threatening workers with worse cuts to their school unless they support Prop. 30. It is one thing for Brown to hold a gun to the head of workers and demand support; it is quite another for teachers’ unions and educators throughout the state to join him in this process. This is a classic divide and conquer tactic which pits workers, rightly mad that they are being asked to pay for the crisis again, against workers in schools and other social services. It will also help the capitalist class attack on public sector workers, as it pits the interests of non-unionized workers against the interests of unionized ones.
Additionally, unions who have agreed to trigger cuts in their contracts are shredding the meaning of a contract between bosses and workers. A contract is a legal promise between workers and capitalists, and usually workers have to fight like hell to force the capitalists to keep that promise. Here, unions are making that promise subject to the whim of voters in a political arena (elections), where the capitalists are strongest and where money rules. Simultaneously, they are taking the defense of the contract out of the arena most favorable to the workers, the arena of struggle. This is not an abstraction. The Chicago Teachers Union shows us the power of workers if they choose to go on strike to fight for a fair contract. At the same time, UESF, UTLA and SDEA show us what happens when unions choose not to exercise that power and instead rush to settle so that they can campaign in November. This is the classic strategy of defeat that has brought the labor movement to the crisis it is in today.
Brown has also tied trigger cuts to the passing of yet another UC fee hike proposal for this fall. And now the Cal State college system “executives” are saying that if Prop 30 doesn’t pass, they won’t be accepting transfers for spring semester (they have already done this for graduate students for most CSUs).
Brown has created a discourse among progressives that has had massive success: without passing Prop 30, he will be “forced” to slash public education and public services budgets. At the same time, he has gotten many on the left to accept the logic that balancing the budget in California is a priority over the funding of state services. This is the political logic of Prop 30, and it represents a giant retreat from a movement whose priority was money for school and social services not banks.
To this end, the strongest criticisms we have of Prop 30 are not simply economic ones (i.e. the regressive sales tax on the 99%) but political ones. As socialists we reject the ideological and political attack on our movement’s goal to combat the shared sacrifice (i.e. taxes, cuts, etc. to the poor) that has been imposed on workers and students. This runs counter to the Occupy movement that has been all about making the 1% pay for the economic and social crisis.
Should Socialists oppose it or ignore it?
We support electoral propositions that would tax the wealthy and corporations – we and other Occupy activists came out in strong support for the Millionaire’s Tax Initiative earlier this year before it was dropped by the CFT labor leadership.
But now that only Prop 30 is in the ballot, should we oppose it or ignore it? What would it mean to ignore it, to not take a position? It is difficult to imagine how one could remain silent or neutral to the “story of Prop 30.” It could only be detrimental to the rebuilding of an independent Left and the rebuilding of a fighting labor movement that is so vital to the future of our movement.
Should the Occupy movement, unions and students put their energy into only the electoral arena to pass Prop 30? Definitely NOT.
Should they use their energy to defeat it? Definitely NOT. There will be a chorus of corporate interest and right-wing lunatics who believe that any tax increase must be opposed and that government spending on education and social services is anathema. Socialists will not be joining them in defeating Prop 30.
What should we do then? Socialists and others of the Left must expose Prop 30 as a political trap laid by the Democratic Party that has once again killed another of our movements. We must end this practice if we are to ever see a future that goes beyond the lesser evil strategy of the Democrats, which has brought us four decades of defeat and retreat.
We must also emphasize that the most important thing we can do now is not knocking on doors about Prop 30, but organizing actions in our campuses, workplaces, unions and in the streets against austerity, against school closures, layoffs, fee hikes, etc. It will be difficult, but we should start rebuilding our movement now.
This means that while we are doing our mobilizations and educational activities, we should patiently explain to folks that Prop 30 is not even a band-aid solution to the incoming austerity measures, and even if it passes, we will still have to fight to prevent Brown and the 1% from imposing their planned draconian measures of layoffs, cuts to our salaries and pensions, fee hikes, cuts to schools, and so on.
Furthermore, we need to be clear that Democrats and labor leaders (their partners in crime) want to use Prop 30 to prevent any big strike or mobilization leading to the elections that might “disturb” their door-knocking and phone banking activities for the Democratic Party. This is why labor leadership consciously made moves to put Prop 30 into the contracts that were being bargained this past summer.
Thus, our stance on Prop 30 is to denounce it as a political maneuver of Brown but to abstain on campaigning for or against it. If the proposition passes or not, the ruling class will continue with its austerity measures regardless. Our time is better spent this coming year by preparing our fight back and to continue building class independence of workers, students and the community and to push for mass mobilizations and class independence.
Lessons from Chicago and California.
The Chicago Teachers pulled a 9-day strike to improve both their working conditions and the education that is provided to their students. The strike was just the first step of the teachers and community fighting back. Obama’s plan to institute merit pay and promote charter schools is still on the agenda and Rahm Emanuel continues threatening to close 100 schools in Chicago. But the strike that was ratified by more than 90% of the membership managed to:
• Hire over 600 additional teachers in Art, Music, Phys Ed and other subjects
• Maintain limits on class size and increase funding for smaller classes
• Add a parent voice on class size committees
• Make textbooks available on the first day of school
• Increase racial diversity in hiring at CPS
• Lessen the focus on standardized testing – keep the focus on teaching instead of tests
• Provide more attention from school social workers and nurses
• Increase funding for Special Ed teachers, social workers, psychologists, classroom assistants and counselors in schools with high caseloads.
We must follow CTU’s example in our unions that are in bargaining and push for similar actions in our schools against the threats of new hikes at the UC or the threats of closure in the case in CCSF. This does not mean mobilizing around ballot measures; this means laying the groundwork now for the strikes and occupations that will be necessary to have our demands met. This will not happen on its own. It will require the building of radical, militant organizations within our unions with a different vision of how our unions should run.
Prop 30 will not stop the austerity measures but it has effectively derailed the rebuilding of a left wing in the student and labor movement that is politically independent and holds onto a vision of a better world. For socialists, the rebuilding of a militant, politically independent left wing is a central task before us if we are ever to turn the tide of struggle in this country.
Building reform groups like CORE in CTU, EDU in UESF, PEAC in UTLA, the Breakfast Club in SDEA and AWDU in UAW are all examples of developments that should be encouraged and expanded across the labor movement in this country. Similarly, Occupy Education and the building of a militant Student Union across California points the way forward for students fighting back against fee hikes and growing student debt. Socialists must play a leading role in building these organizations and arming them with radical Marxist politics, which is necessary for the reconstruction of a strong revolutionary Left in the US.