What Reforms Will Come If Prop 30 Fails?


Californians are being told the defeat of Proposition 30 would be the end of the world.

But the truth is that the defeat of 30 might be a beginning: The beginning of a big -- and much delayed -- debate over bigger reform in the state.

That debate is likely to start with a big argument about the state's tax system.

Over the past few years, there have been two major efforts to remake the tax system. One, a state commission appointed by Gov. Arnold Schwarzenegger and the legislature, came up with a plan. So did the Think Long Committee for California, convened by billionaire Nicolas Berggruen.

The plans were similar. Each group proposed to expand the tax base while attempting to lower rates. The state commission proposed a new kind of tax called a business net receipts tax. Think Long proposed expanding the current sales tax, which now covers only goods, to include services as well.

One person who was on both bodies, Gerry Parsky, spoke last week at a conference put on by the Public Policy Institute of California. Parsky indicated he would pursue a similar plan if Prop 30 loses.

"That reform is waiting for Prop 30 to fail," Parsky said at the PPIC event.

But what if Prop 30 passes? Tax and other reforms would have a tougher road, since Brown and his backers would likely declare the state's budget and revenue problems solved (even though they wouldn't be, given the broken budget system and the fact that the tax revenues in Prop 30 are only temporary).

In this context, the choice over Prop 30 looks harder: Vote yes and grab some short-term revenues and fixes, or vote no and touch off a big, but scarier conversation about real reform.

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