Longer life eyed for tax on wealthiest Californians

SACRAMENTO, Calif. — When Gov. Jerry Brown and his allies urged voters to adopt a temporary income tax on the wealthiest Californians and a statewide sales tax on everyone four years ago, the deal was billed as a short-term salve for a state mired in debt and on the verge of insolvency.

The taxes were needed to stave off $6 billion in so-called “trigger cuts” to schools and social programs baked into the state budget by Democrats as a threat to voters. Lawmakers also threatened to cut three weeks off the school year if Proposition 30 didn’t pass.

“Each of us need to do what we can, and for those who’ve been most blessed, we’re going to ask you for seven years. The biblical seven years,” Brown told an audience at the Commonwealth Club in November 2012. Voters bought the pitch. Now, with the sales tax set to expire at the end of this year, and income taxes on earnings above $250,000 a year set to end in January 2019, the California Teachers Association and other labor unions want to keep the income tax, which they say is again needed to prevent $4 billion in cuts to schools.

Proposition 55, they say, does not raise taxes on anyone; it simply maintains the current income tax rates. The measure would extend the income tax for another 12 years, raising from $4 billion to $9 billion a year, according to the independent state Legislative Analyst’s Office. The sales tax would expire as planned in January.

In 2012, ballot arguments for the initial measure promised that “the money raised for schools is directed into a special fund the Legislature can’t touch and can’t be used for state bureaucracy.”

Brown also vowed in campaign ads that money from the initiative “must go to the classroom and can’t be touched by Sacramento politicians.”

The wording wasn’t exactly true. Although money raised for schools has gone to school districts, which are required to post annual audits, only about half the funds from Proposition 30 have gone toward school funding, according to the Legislative Analyst’s Office. The state budget mandates that about half of general revenues are dedicated to education.

“Our estimate is that Prop. 30 has increased that pot of money by roughly 50 cents on the dollar,” said Ken Kapphahn, an LAO analyst.

For instance, Brown’s finance department estimates Proposition 30 taxes will raise about $7.7 billion in the 2016-17 budget approved by the Legislature.

“School funding didn’t increase $7.7 billion, it increased $3.8 billion” in the current budget, Kapphahn notes.

The rest of the money has gone into the state’s general fund that pays for a host of other state programs, from child care to parks and prisons. Overall state spending has increased each year since voters approved Proposition 30, precisely as the LAO predicted it would.

David Kersten, a tax analyst and former lobbyist, is the lone registered opponent of Proposition 55, raising $3,000 against it. He argues that the education system should first be forced to demonstrate it can spend more efficiently before the tax is extended.

Meanwhile, Brown has remained neutral on the campaign to extend the income taxes, telling reporters in May when he released a state budget revision: “I said it was temporary when I started. I got Prop. 30 passed, I helped pass it, and I think I’ll leave it there.”

TARBORO, N.C. — Tiajuana Williams lives in a one-story apartment building in Princeville, North Carolina, that was flooded by a river bulging with rainwater from Hurricane Matthew. Before driving out of town in her Honda Civic ahead of the storm, she hurriedly packed a small bag with little more than a change of clothes.

Now, even while seeking aid to replace her belongings and arrange long-term housing, she has more pressing needs: “I ain’t got no clothes. I left my clothes in there!”

If other recent floods in Louisiana and elsewhere are any indication, she could face a long road to recovery. She filled out a FEMA application online and signed paperwork Thursday with an agency representative who met with people in Tarboro, just across the Tar River from Princeville.

But Williams was told that it could take a week or more to get to the next step, which will be a phone call from another representative who will go over her information again. She doesn’t have renter’s insurance and fears her stuff has been ruined. Making matters worse, she hasn’t been able to get to her job as a home health nurse and doesn’t expect a paycheck this week.

“I’ve had a headache for about four days,” the 53-year-old said, taking a drag off a cigarette.

Her stress may not go away anytime soon if other recent flood disasters are a guide. In Louisiana, thousands of displaced families are still waiting for government assistance after the catastrophic deluge there two months ago — from a storm system that didn’t even have a name.

Amanda Burge doesn’t feel any closer to returning to her home in Denham Springs, Louisiana.

She is struggling just to get her family on the waiting list for a government-issued mobile home, which would allow them to live on their property while they repair damage. Daily phone calls to FEMA haven’t yielded any answers for when — or if — they can get one delivered.

“We feel like we’re not making any progress forward,” said Burge, a married mother of three young sons. “We don’t want money in our pockets. We just want to go home.”

Last month, Congress authorized $500 million in flood recovery grant money for Louisiana and other states. That was before Matthew churned up the East Coast.

In West Virginia, where 23 people died in June flooding and thousands of homes were damaged or destroyed, rental options are scarce and the hilly terrain leaves few flat areas open for new construction. Clay County commissioner Jerry Linkinogger estimates nearly 1,000 people in the central West Virginia county of 8,500 residents applied for FEMA aid. The county has only one small hotel, so some flood victims left the area to find temporary housing.

“For a while, we had people living in tents,” he said. “People are just working their way back slowly.”

FEMA spokesman Rafael Lemaitre said the federal government currently has about $5 billion in a fund for all FEMA-funded disaster relief work.

“We’ve known for quite some time that flooding is the most common and costly disaster we see in the U.S.,” Lemaitre said. “We’re working very hard to make sure impacted areas get the support they need from the federal government.”

More than 24,000 survivors in hard-hit North Carolina have applied for federal disaster assistance, and FEMA has approved more than $5.8 million in individual assistance to cover needs including repairs or temporary housing, Lemaitre said Friday. That amount is expected to increase.

As of Thursday morning, about 3,400 people were staying in more than 40 shelters in eastern North Carolina. The next step is to move them into hotels or rental properties.

“We want to get these people out of shelters so they have more privacy, so they have more dignity, so they have better care, so they can be with their families and reunited with their pets if possible,” Gov. Pat McCrory said.

More permanent housing will be “a major challenge,” McCrory said.

In Louisiana, FEMA mobile homes are considered the last resort. The primary vehicle for helping displaced homeowners is the state-run, federally funded “Shelter at Home” grant program, which enables residents to live in their homes while making repairs. It’s the first of its kind since Superstorm Sandy in 2012, according to Lemaitre.