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Dueling California Measures Set to Tax Rich, Gut Unions

Two ballot measures for Californians this fall could shape the state's politics--a millionaire's tax, or a historic attack on unions' ability to influence campaigns.

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Controversially, the measure would also add a quarter of a percent to the state sales tax, raising it to 7.5 percent. That part of the measure would cost “a penny on a $4 cheeseburger,” as CFT puts it. State sales tax in California is already the highest in the country.

Some union backers of the tax measure have been less enthusiastic about it since an earlier proposal initiated by the CFT was scuttled.

The union was promoting a permanent “millionaires tax,” and a grassroots campaign gathered thousands of signatures early this year. When Governor Jerry Brown put forward his own proposal—backed by the state’s largest unions—CFT leaders worked out a compromise rather than have two similar measures on the ballot.

The compromise, which became Prop 30, limited the income tax hike to seven years and added the four-year sales tax hike, but it also raised taxes on a bigger swath of the wealthy. The threshold was lowered from $1 million to $250,000 for individuals.

Now Brown is seen as Prop 30’s main proponent, not the unions, and he is decidedly not running a “tax the rich” campaign. He leads with the dire consequences to education if Prop 30 fails, and speaks of the need for government to stay within its means and pay down debt through “shared sacrifice.”

TAX MILLIONAIRES

Unlike Brown, the CFT is making “tax the rich” the centerpiece of its campaign. Along with the California Nurses, they’ve led creative actions to bring a spotlight on the tax. They put on a skit in front of a yacht club mocking billionaires for worrying about their toys instead of on the state of education in California.

The tax measure was polling at 55 percent in late August, with 36 percent opposed, possibly fostering complacency. Most private sector unions are focused on defeating Prop 32.

Michael Sasson, a clerical worker at UC Berkeley and a Teamster, says his union’s Labor Day picnic featured many “No on 32” signs but almost nothing on Prop 30. A memo from the local asked for volunteers against the anti-union measure, but didn’t mention anything else on the ballot.

“I’m on board against 32,” Sasson said, “but when I talk to my co-workers or to other parents at my daughters’ schools, if we don’t also talk about saving the UC budget and keeping teachers from being laid off, people won’t want to listen.”

The state AFL-CIO and the 700,000-member SEIU state council are shying away from emphasizing the threat to union rights. Instead, they call Prop 32 the “Special Exemptions Act” and decry its “loopholes” for “corporations, billionaires, and SuperPACs”—not an entirely accurate claim, since unions get the same loophole.

The state fed’s Steve Smith says the organization is planning the “largest voter mobilization effort we’ve ever had in California,” with up to 40,000 volunteers. Spending will be in the tens of millions of dollars, depending on how much TV the other side buys. Opponents of the last such bill, mostly unions, spent $54 million in 2005.

Unions enjoy 18 percent density in the state, with 2.7 million members, and the state fed believes it has identified 2.5 million more voters with similar values.

Smith says high turnout of union and likeminded voters will have a spillover effect favoring the tax measure, whether or not they’ve been talked with about it directly.

The biggest donors to both the anti-32 and pro-30 campaigns are unions. The California Teachers Association (the NEA affiliate) has given $16 million to fight the paycheck-deduction measure and $1.6 million for the tax fight.