Reiner Drops Initiative to Raise Taxes for Schools

The prospect of a major fight at the polls this year over revamping Proposition 13 to raise more money for schools disappeared Thursday as film director Rob Reiner and the state’s largest teachers union abandoned their plans for a November ballot initiative.

The measure would have pitted Reiner against Gov. Arnold Schwarzenegger over the idea of raising commercial property taxes.

Reiner and Barbara Kerr, president of the California Teachers Assn., said they had gathered enough voter signatures to qualify for the November ballot, but other proposed measures calling for higher taxes led them to abandon the initiative.

“The ballot has gotten very, very crowded,” Kerr said. “This is too important to put out there with all this clutter.”

Supporters of the measure said its withdrawal would deny schoolchildren desperately needed services, including universal preschool and smaller class sizes.

But critics welcomed the measure’s demise, saying higher property taxes for businesses would have put a major drag on California’s economic recovery.

“It couldn’t have come at a worse time,” said Allan Zaremberg, president of the California Chamber of Commerce.

The proposed amendment to the state Constitution would have adjusted Proposition 13, the landmark 1978 ballot initiative that capped property taxes for businesses and homeowners.

Supporters said it would have generated an estimated $4.5 billion a year for education by raising tax rates on commercial property and residential rental property from the 1% of assessed value that all owners now pay to 1.55%.

Sensitive to the dangers of tinkering with Proposition 13, Reiner and the union stressed that the measure would not affect homeowners. Anti-tax groups, however, charged this week that a “drafting error” could have led to a $10-billion increase in property taxes for homeowners. The teachers union denied the allegation.

Still, the withdrawal came at a time when the political climate for winning voter approval for higher taxes in California appears difficult at best, organizers said.

Last month, Californians voted by a landslide, 66% to 34%, against Proposition 56, a union-backed measure that would have changed state budget rules to make it easier to raise taxes.

Polls showing heightened voter opposition to tax hikes led a hospital trade group on Wednesday to yank its support for another possible November ballot measure that would raise taxes. That proposal would levy $550 million in new phone taxes to pay for emergency health programs.

Despite strong public support for the measure last year, more recent polling found voters have grown more wary of tax increases, said Jan Emerson, vice president of the hospital group, the California Healthcare Assn.

“The political environment is different,” she said. “Today, there doesn’t appear to be the strong willingness by voters to consider tax increases for services that they see as valuable.”

Reiner and the teachers union faced another formidable obstacle: Schwarzenegger. The governor, who often says higher taxes would damage the state’s economy, had pledged to campaign against the measure.

“It wouldn’t guarantee defeat, but it would certainly guarantee it would be a much tougher campaign,” said Tim Hodson, director of the Center for California Studies at Cal State Sacramento.

Schwarzenegger’s success in winning voter approval for his budget measures in March suggests his opposition could have posed major trouble for the teachers union and Reiner, a Democrat who at times has flirted with a run for governor.

The measure’s backers acknowledged that Schwarzenegger’s opposition played a role in their decision to pull the plug. But they downplayed the governor’s influence.

Campaign consultant Gale Kaufman said internal polling indicated strong support for the commercial property tax increase. The campaign reported that it had spent an estimated $2.5 million collecting signatures and had planned to devote $20 million to the campaign. She said the cost to collect signatures and run a formidable campaign were prohibitive.

“It wasn’t about the specific political climate,” Kaufman said of the decision to withdraw. “It was about a ballot that was getting overwhelmingly complex and a concern about how the November election would play out.”

Educators and other supporters of the tax hike said the extra money would have buttressed school funding. California’s public schools have lost an estimated $5 billion in state funds over the last 2 1/2 years, forcing school districts to eliminate the popular class-size reduction program in some early grades and lay off teachers, counselors, nurses and others.

“Kids are literally learning in hallways and closets because classes are overflowing,” said Ben Austin, a Reiner aide. “That is not going to get any better this November because we are pulling this initiative.”