Thursday, October 31, 2002

False Advertising

Sunday evening I saw a political advertisement in favor of Prop 47. It starts with the talking head of Larry McCarthy, president of the California Taxpayers' Association (Cal-Tax), saying, "Prop 47 makes schools a priority, and it does so without raising taxes, and it does so through accountability. … Prop 47 is one of these rare opportunities where taxpayers and schools and kids and parents all can win." It ends with the following screen:



(without new taxes)

What, pray tell, is this amazing plan that will improve the public schools without raising taxes? School vouchers, maybe? Charter schools? Nope -- Prop 47 would approve a new $13 billion bond issue by the state of California, with the money reserved for public schools construction and renovation projects. To claim this plan wouldn't raise taxes is disingenuous at best. If the state of California borrows money now, it has to pay it back later. Where will that money come from? Taxpayers, of course. At some point in the future, legislators will have to either (a) raise taxes, or (b) reduce spending on other programs to free up the necessary tax revenue. Just like any other new spending proposal.

McCarthy defends his claim like so: "In contrast to public finance insanity at the state and local level in California, Proposition 47 guarantees planning, cost containment, accountability and solid management in the spending of tax dollars for schools." But this is true only for the *new* funds raised by the Proposition. So far as I can tell, the Proposition does nothing to improve the efficiency with which existing funds (for education or anything else) are used. So even if the new funds are used with sparkling efficiency, public spending will still rise by the amount of the bond issue.

McCarthy continues: "It is our opinion that the only way this bond is a tax increase is to assume that, within the $120 billion a year in state and local taxes already paid, there is no opportunity to set different priorities. It is to say there is no chance to eliminate fraud and outrageous waste of tax dollars." Waste and fraud are, of course, rampant in the state government. But Prop 47 does not one blessed thing to remedy that situation! Providing the state with more funds to allocate creates no incentive to use existing funds more efficiently. Essentially, McCarthy's claim is that Prop 47 won't require new taxes *if* the state suddenly cleans up its act by eliminating waste and fraud from the budget. But if the state did that, then a new bond issue would be unnecessary, as the construction and renovation funds could come out of the savings.

Shame on McCarthy and Cal-Tax for false advertising. Perhaps they think Prop 47 is really a good idea, because the educational gains are worth the expense. If so, they should say so explicitly, instead of deliberately misleading voters into thinking they can have a free lunch.

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