Davis’ Bold Vision Getting Big Play, but Little Backing

Outside California, Gov. Gray Davis is grabbing attention as an avatar of change in an area--education--that is the issue of top concern to voters.

One-upping political leaders who talk about the need to improve schools, Davis has proposed that California exempt public school teachers from state income taxes. It was, he said, a bold idea. It would encourage young people to enter teaching, keep veteran teachers in the classroom and lure teachers from other states to California.

No matter that his aides had not fully fleshed it out, the concept attracted network news coverage and headlines in New York, Chicago and elsewhere.

Back home, however, Davis is having a hard time convincing people--even teachers--that they should implement his vision. In fact, the reaction has been so downright nasty that Davis’ aides were taken aback.

For the first time in his 17-month tenure, Davis faces the sobering prospect of having to fight hard for his idea--and possibly lose--in a Capitol controlled by fellow Democrats.

While Davis calls the teacher tax elimination concept the “crown jewel” in his $98-billion budget proposal, it’s also perilous. If he fails to win passage of one of his big ideas, he risks appearing weak. If the plan flops, he may be taken less than seriously the next time he makes an unusual suggestion.

Davis acknowledges that the teacher tax elimination might not pass the Legislature. But he also vowed to “fight for this puppy.” Unless he concludes that this dog won’t hunt, the governor, who last year made a big deal of signing the budget before the July 1 start of the fiscal year, may be spending a chunk of the summer in a protracted budget battle.

“I don’t believe we’re going to have to hold up the budget,” said Phil Trounstine, one of Davis’ top aides. “I think we’re going to get the legislation. There is nothing to be frightened of. There is nothing here that deserves anything other than wholehearted support.”

Davis and his aides are tapping lobbying groups for help getting legislative support. One is California Business for Education Excellence, an association of such major business groups as the California Chamber of Commerce and Technology Network, and employers including Boeing and Hewlett Packard.

“Our guys like the governor,” Executive Director Burt McChesney said Tuesday. “They are very supportive of the governor. We need to do some extraordinary things to recruit teachers.”

On numbers alone, Davis should win. California governors, especially riding high in the polls, have vast power and generally get most of what they want in annual budgets. And while the state Constitution requires the Legislature to approve tax increases by a two-thirds margin, a simple majority can cut a tax.

With Democrats holding a 47-32 majority in the lower house and 25-15 in the Senate, Davis might have little difficulty--except that many of the most strident foes of his proposal are Democrats. And Republicans--the party of tax cuts but not the one that gets the bulk of teacher union donations--are adamantly against it.

A few days before Davis proposed the teacher tax exemption, Scott Baugh, leader of the Assembly’s minority Republicans, quipped, “I’ve never met a tax cut I didn’t like.” After Davis offered his idea, Baugh, who is from Huntington Beach, felt as if he had finally made such an acquaintance. He called the proposal discriminatory against other “noble professions.”

“That one arrived in a coffin, and we’re just throwing dirt on it,” Baugh said.

Like Baugh, Senate President Pro Tem John Burton (D-San Francisco), the state’s most influential Democratic legislator, warned that exempting one profession from income taxes would send the state on a “slippery slope.” Other public service employees such as police, social workers and nurses would want an exemption of their own.

Further weakening Davis’ position, teachers are split, even though they would gain the most.

The most powerful teachers union, the California Teachers Assn., has yet to take a stand. But the California Federation of Teachers, which represents 50,000 public school teachers and 50,000 other school employees, opposes the tax exemption, and United Teachers-Los Angeles, representing 43,000 public school workers including 36,000 teachers, stops just short of opposition.

“Just pay us what we’re worth and we’ll worry about the taxes,” said Steve Blazak, spokesman for the Los Angeles union.

Teacher union officials worry that a tax exemption could cause a reaction against them among other public employee unions. Teachers hope other unions will support their campaign to defeat an initiative on the November ballot to allow tax-funded vouchers for private school tuition.

“It could be divisive,” Blazak said. “This is not a time to be putting ourselves above everyone else.”

Despite reactions that range from quizzical to tepid to hostile, Davis cannot easily drop the idea. The self-described centrist who jokes about his lack of charisma has veered far from the middle of the road, and the idea has attracted too much attention for him to simply drop it.

None of his education ideas--not teacher bonuses for improving student test scores, not a plan to help teachers buy homes, not forgiving teachers’ student loans, not even the $1.8 billion he proposes giving to schools primarily for teacher raises--has grabbed national headlines the way the tax exemption did.

“He has no intention or desire to walk away from this,” Trounstine said. Trounstine cites other tax breaks, including the home mortgage deduction, to support the administration’s contention that state lawmakers routinely use the tax code to promote social values. Davis’ aides also noted that other countries exempt teachers from income taxes. “He is serious about this because it is a great idea.”

And there is a need to attract and retain teachers. California has a teacher shortage. The state Department of Education estimates that California must recruit 26,000 teachers each year for the next 10 years to replace retiring teachers, and meet the demand of growing enrollment.

What’s more, 34,000 of the state’s 285,000 public school teachers don’t have full teaching credentials. Most of those 34,000 teachers work in urban school districts.

“Without sounding combative, we have to recruit 250,000 to 300,000 teachers,” said Garry South, Davis’ chief political advisor. “For those who don’t like this idea, let them come up with their own.”

Most Democrats don’t want to embarrass a governor from their own party by rejecting the idea outright. Assembly Speaker Bob Hertzberg (D-Sherman Oaks), for one, is mulling over tax credits specifically aimed at helping teachers--and helping spare Davis embarrassment.

In the upper house, Sen. Jack O’Connell (D-San Luis Obispo) won a budget subcommittee vote on Monday boosting beginning teacher salaries to $38,000 a year, from the current $32,000. That would cost the state $325 million, significantly less than the $545 million price tag for Davis’ income taxes elimination for public school teachers.

Davis’ idea has spurred talk in other state capitals. In Arizona, Gov. Jane Hull considered it but concluded that it violated that state’s Constitution by discriminating among classes of taxpayers. Hull, like other governors, is looking for solutions elsewhere, including a sales tax increase to raise school funding.

So far, Davis has not lined up a legislator to carry a bill authorizing the tax exemption. But if he does, and if such a bill makes its way to the Senate floor, Senate Republicans will be ready with some suggestions. They intend to load up the bill with tax exemptions for police, nurses, social workers, firefighters, essentially every occupation there is.

“It will be the largest tax cut in California history by the time we’re finished with it,” said the Senate’s GOP leader, Jim Brulte of Rancho Cucamonga.