SACRAMENTO, CA — In a new editorial published over the weekend, the San Francisco Chronicle urged Californians to vote No on Proposition 40, warning that the measure puts the state’s economy, long-term fiscal stability, and funding for essential public services, including healthcare and education, at risk.
The Chronicle also cites concerns raised by key opponents of Prop. 40, including Planned Parenthood Affiliates of California and the California Medical Association, about committing funding to services without reliable ongoing revenue and missing safeguards that allow lawmakers to spend the measure’s money however they see fit.
Media outlets across California have called on voters to reject Proposition 40, including the Southern California News Group and its 11 daily newspapers, La Opinión, Los Angeles Times, KCRA 3, San Diego Union-Tribune, Bakersfield Californian, El Popular, Bay Area Reporter, Santa Barbara Independent, Oakland Post, Mercury News/East Bay Times, and the Washington Post, among others.
Key excerpts from the editorial:
On the broad and diverse coalition opposing Prop. 40, including Planned Parenthood Affiliates of California, doctors, and teachers:
Is Prop 40 so flawlessly executed that California has nothing to lose if it passes?
Opposition from the California Teachers Association, Planned Parenthood, California Medical Association, the NAACP, California Professional Firefighters and the State Building and Construction Trades Council of California suggests not.
On the consequences of Prop. 40:
Sending billionaires and the jobs and economic might that come with them to Texas or Florida does not help California.
…
So, will Prop 40 send billionaires fleeing?
A working paper from Stanford says yes, and argues that exodus will result in a net tax revenue loss of nearly $39 billion for California.
…
California’s nation-leading 13.3% marginal income tax rate—necessary as it may be, given our state’s finances — already poses a flight risk. Even Gamage said he was “uncomfortable” with the top rate. A wealth tax merely compounds a danger that already exists.
…
Many argue that the talent ecosystem in California makes an exodus impossible.
But people said the same thing about Hollywood for decades. Now the entertainment industry is shedding thousands of jobs to states like Georgia and North Carolina that offer more favorable economic incentives.
If movie titans are willing to abandon a company town practically built to indulge their excess, it’s not a stretch to imagine a significant portion of the tech universe fleeing to Miami or Austin, where workforce housing is cheaper, they would pay no state income tax, and the sword of future wealth taxes would no longer hang over their endeavors.
On the uncertainty surrounding the measure:
Ultimately, neither this editorial board nor anyone else has any idea what the full effect of Prop 40 will be.
Even Emmanuel Saez, the French economist and an author of Prop 40, has conceded that his measure is an “experiment.”
It just happens to be one dropped into the maw of the world’s fourth-largest economy — a wealthy state in aggregate, but one with a volatile, incoherent system of taxation and the highest poverty rate in the nation.
On the risks to California’s economy:
If Prop 40 backfires, California will have chased away its cash cows with no backup plan. Our sales and income taxes are already the highest in the nation; there’s no more room for hikes. Meanwhile, Prop 13 stunts our ability to raise new revenue from property taxes.
No one is coming to save us. And it won’t be the wealthy who suffer.
The Chronicle concludes:
Maybe, just maybe, the stakes are too high in California to be playing a game of chicken. Maybe the brightest and boldest minds in the field of economic justice should help stabilize California’s tax base before turning our state into a laboratory?
Read the full San Francisco Chronicle editorial here.