School spending transparency highlights proposed income tax measure

Despite the still struggling economy and the sharply partisan political landscape, advocates for raising $10 billion annually for California schools through higher income taxes - say voters are ready and willing to embrace such a plan.

We see voters being very, very worried about education," said Molly Munger, a Los Angeles-based attorney and philanthropist and one of the architects of the "Our Children, Our Future" education act that would not only provide a big fiscal boost to early learning programs and K-12 schools- but also apply groundbreaking transparency to the state's byzantine system for funding public education.

"(Voters) get the fact that if you continue to have a disinvested education system - with kids graduating who haven't had the chance that they deserve, then you are committing yourself to an endless stream of higher expenses for health, public safety and prisons," she said. "It's a bad idea and the voters have it right."

The measure, which is set for submission today to the state Attorney General for review and approval before signature gathering, would impose an average of 1 percent hike of the state's existing income tax, to 6 percent.

The new money would flow to districts outside the state's Proposition 98 funding guarantee with spending decisions made exclusively on the local level - neither the governor nor the Legislature would have any oversight authority.

While the money would be sent to districts, each school site - including charters - would receive individual awards based on student enrollment and demographics. And the money coming to each school would be required to be spent there.

For the first time, if the measure is adopted, districts would be required to provide the public detailed disclosure of how money is spent at each school site - a change that fiscal reformers have been advocating for years.

Although the state's fiscal officers - treasurer, Attorney General, auditor, director of finance and controller - would serve as the board supervising the new tax money, no new bureaucracy would be created to ensure accountability.

Munger, daughter of Charles Munger - longtime business partner of investor Warren Buffet, said Tuesday that the new school-site disclosure requirements are key.

"Sunlight is a great disinfectant provision," she said. "We think that's a very important reform. It's something that people have talked about for a long time. And if we are going to ask voters to dig into their pockets - let's get some transparency where this money is going."

There are some restrictions on the use of the money including a prohibition against spending for salaries and benefits.

Schools would also each have a "maintenance of effort" target set on a base year to protect against administrators using the new money to pay for old expenses.

Although the proposal is already competing in a crowded field of initiatives expected to be put before voters next fall - Munger said their plan has polled well.

Because of California's highly progressive income tax system, Munger said the simple hike in the rate - that would take a larger share from the rich than from the poor - has been well-received by voters.

The California PTA has already endorsed the plan and there are ongoing talks with other parts of the education community that appear to be promising - although the powerful California Teachers Association has yet to weigh in.

Still, Munger said there are clear signs that voters in California are concerned enough about schools that they would support higher taxes.

"Here we have a voting public that is saying that they are willing to pay more - at least for education," she said, noting the results from internal polling as well as other recent surveys.