Governor Denies Tax Cut Would Harm Education

The debate over Gov. Pete Wilson’s sudden pitch to cut the state income tax has quickly found a focus--the impact a tax cut would have on public school budgets.

Because public education is guaranteed the largest chunk of the state’s budget, any drop in tax revenue automatically reduces the amount of money that can go to schools.

But Wilson insists that--this time--his tax cut proposal has been meticulously crafted to avoid harm to schools, in part because that was a major reason that his previous tax cut plans were defeated by the Legislature.

The governor’s tax cut would take full effect during the 1999-2000 budget year and would be worth a maximum of $332 a year for a family and half that for individuals.

Over the next six years, Wilson says, his plan would trim only $2.5 billion from education budgets, leaving schools $143 billion to spend.

“For people to oppose this, I think, is an exercise in greed,” Wilson said in an interview with The Times. “It was . . . crafted to avoid having any harmful impact on education. We are able to do this because the economy has not just turned around but done so dramatically. And the projections are for continued spectacular growth.”

As many voters know, however, California public schools are in bad shape. Elementary school test scores are near the bottom in the nation and spending on music, counseling, libraries, school nurses and other services--cut during the state’s recently ended recession--has not been restored.

Indeed, the state’s annual spending per pupil now is about $1,100 lower than the national average.

As a result, the dispute has given Democrats an opening to try to again seize leadership on education issues--a popular high ground the governor has claimed with a series of initiatives over the last two years.

And because the schools have powerful allies--from parents eager to see improvements, to well-organized lobbying groups, including the 250,000-member California Teachers Assn.--they are in a position to help the Democrats fight the tax cut.

With the state’s budget now 22 days late, the dispute is being intensified by politics and personalities.

State Senate President Pro Tem Bill Lockyer (D-Hayward) accused Wilson of proposing the tax cut to make himself look better should he decide to run for president when he leaves the governor’s office in 1999. Wilson, in turn, called Lockyer’s assessment of his motives a “cheap shot” and implied that his adversary might have much the same idea in mind. “Should I be talking about Sen. Lockyer’s candidacy for attorney general?” the governor asked.

On Monday, the gap between the two sides seemed to widen on a number of issues. In addition to differences over the tax cut, Assembly Democrats insisted that the budget must now include as much as $121 million for the state to replace federal money that is slated to be lost in welfare reform.

The governor said he canceled vacation plans for the first week in August. Lockyer said lawmakers, who had a monthlong recess scheduled to begin last Friday, will conduct regular legislative business for the foreseeable future.

For all the rhetoric and political sparring, the two sides do not differ much on the actual numbers offered up in discussing the impact of a tax cut on schools. As with many disputes involving numbers, however, the meaning of the figures is subject to interpretation.

Wilson said the arguments of Lockyer and education groups that the tax cut would savage public school spending were simply “lies.”

The schools, he said, would have plenty of money to keep class sizes small through third grade (meaning no more than 20 students) to buy more computers, to have a statewide test of basic skills and to keep the push on to improve reading scores--in other words, to continue the reforms that Wilson has pushed hard.

Public schools had $4,904 per pupil to spend last year, with a small amount of federal aid on top of that. Even with the tax cut, they would have $5,811 per pupil by the year 2001, according to administration projections.

The administration figures that is enough to cover the cost of current programs and still leave $600 million to $1 billion each year for all sorts of discretionary programs. Wilson said that money could be spent to give a raise to teachers, who now earn an average of $43,114 annually, or lengthen the school year, which in many districts--including Los Angeles--is now 172 days.

“I think that would be a splendid thing to do,” Wilson said, though he added that each school district will be able to decide whether to use its money that way.

Each additional school day added statewide costs about $50 million a year. Without a tax cut, the schools would have enough money to add 12 days to the current calendar--were legislators interested in doing so.

Lockyer did not dispute that Wilson’s plan would allow current school improvement efforts to continue. But he argued that it does not include enough money to launch new initiatives.

For example, while Wilson seems content with current plans to reduce class sizes in kindergarten through third grade, Lockyer calls for expanding the reform through 12th grade.

“We want to continue reducing class size in other grades, including high school,” Lockyer said. “We want a longer school day and school year, we want more computerized classrooms, we want more materials and textbooks, improved libraries . . . and many of us believe that teachers are not overpaid, that they’re entitled to get better compensation.”

Over the past decade, the average teacher’s salary has increased an average of 2.7% a year, with inflation taken into account. Each percentage point in raises, applied statewide, now costs about $145 million.

As a start, Lockyer said, California should pump up its education spending by $1,000 per pupil--or $7 billion--to reach the national average. “That means our target is mediocrity,” he said.

But the Democrats’ spending plans make them vulnerable to Wilson’s accusations that they are spendthrifts ready to waste tax dollars on pet projects that are not central to learning.

Republicans cite the wish list that Democrats offered in their latest proposed budget. It includes items such as $2 million to boost college preparatory programs, $750,000 for an African American museum, $1 million to fight truancy in Fresno, $1 million for a Latino heritage museum, $300,000 for “homework help” centers and $2 million for the Simon Wiesenthal Center in Los Angeles.

Lockyer conceded that Democrats will have to trim their proposals so they won’t exceed current revenues, much less those that might be shrunk by a tax cut.

Wilson said the unexpectedly strong rebound of the state’s economy has already given schools far more money than they anticipated just a few years ago, about $6 billion in the past two years alone, an increase of about 24%.

That boost, along with future funding, should be enough to pay for the reforms that would enable California schools to measure up nationally, he said.

“If . . . we are not producing proficient readers by the end of grade three, I will not just be grievously disappointed but genuinely shocked,” he said. “There is no reason those test scores can’t come way, way up.”

But some education advocates say the governor’s level of support would not even fully restore the setbacks suffered in the past decade.

In 1987, schools had about $3,600 per pupil to spend. This fall, taking inflation into account, schools will have slightly less than that.

John Mockler, a public school lobbyist who helped write the state’s school funding law, draws an even more dramatic comparison. When Ronald Reagan was governor in 1972, he said, California’s spending on its schools represented about 5.6% of the state’s personal income. Today, the state is spending about 3.7% of its income on schools, representing a gap of $17 billion.

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School Spending

The Wilson administration says that, even with a proposed tax cut, per-pupil spending would rise steadily. Without the cut, schools would have $109 more for each child by 2001. Some education lobbyists argue that the amount would be even higher.

Spending per pupil (in thousands)

*--*

With tax cut Without tax cut 1998-1999 $5,274 $5,314 1999-2000 $5,425 $5,526 2000-2001 $5,631 $5,737 2001-2002 $5,811 $5,920

*--*

National avg.: $6,100*

* for 1995-96

Source: Governor’s office