Ad Watch: No on 30 campaign misleads on gasoline tax, school funding, donors

10/24/2012 12:00 AM

10/24/2012 7:55 AM

The No on 30 campaign launched a new ad this week attacking Gov. Jerry Brown's initiative raising taxes for education and the state budget. Following is the text of the ad and an analysis by Kevin Yamamura of The Bee Capitol Bureau:

Woman: We all want better schools, so Prop. 30 seemed OK. Then I read the ballot pamphlet.

The official title and summary says the new tax dollars can be used by politicians to fund other programs in the state budget.

Prop. 30 makes our sales tax the highest in the nation. A billion dollars more a year for gasoline, clothes, things we buy every day. But not a penny guaranteed to the classroom.

Narrator: It's just another misleading budget gimmick by Sacramento politicians. No on 30.

ANALYSIS: As consumer anger spikes over rising fuel prices in California, the ad states the sales tax increase in Proposition 30 will be applied to gasoline, which is far from certain.

The nonpartisan Legislative Analyst's Office and Brown's Department of Finance believe the initiative does not result in additional taxes at the pump.

Opponents have legal theories suggesting how Prop. 30's quarter-cent on the dollar increase could extend to gas. They argue the constitutional amendment could override state law or the state Board of Equalization would raise the fuel excise tax, which is pegged to the sales tax.

The Analyst's Office disagrees and did not calculate higher gas taxes in its official fiscal review. But the LAO says the issue is open to legal interpretation and not clear-cut.

The Analyst's Office does believe the initiative would result in a higher diesel fuel tax, which was not exempted from state sales tax.

The ad also misleads when it says "not a penny guaranteed to the classroom."

The initiative raises an additional $6 billion in state taxes annually. New money will flow to general budget programs and schools.

When state revenues increase, especially after a period of school cuts, education must receive a large share of new tax dollars. This is guaranteed in the constitution, contrary to the ad's claim.

Finally, the ad is financed in part by the Small Business Action Committee, which has taken an $11 million donation from an Arizona nonprofit for which no donors have been disclosed. The maneuver leaves voters unable to evaluate the motivations of some of the committee's financial backers.

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