Selling Prop 30

Dec. 5, 2012 — In ratifying Proposition 30 last month, California voters seem to have signaled that support for a tax increase is not political suicide in all circumstances. But to what extent does the marketing of the measure — a ballot initiative that raises taxes on annual income greater than $250,000 — provide a model for others to be successful in raising revenue for a spectrum of needed government services?  Interviews with many of those involved in the campaign for Proposition 30, as well as conversations with independent observers, revealed five messaging techniques that appear to have resonated with voters.  Nevertheless, the compromises that some tax-increase supporters had to make, along with Governor Jerry Brown’s singular focus on the Proposition as a needed response to a unique crisis, meant broader arguments about the need for more robust government services in general did not receive as much attention and were not as fully tested as they could have been.

A national bellwether?

California, like much of the nation, has been dominated by an anti-tax mentality for the last 30 years. Many point to the passage of Proposition 13 in 1978 — a California ballot measure that limited all real estate taxes in California to 1 percent of the full cash value of any given property — as the beginning of a nationwide “taxpayer revolt.” According to Fred Glass, the communications director for the California Federation of Teachers, a statewide teachers union, “the conservatives completely spooked the Democrats over this period of time. Democrats thought they couldn’t talk about taxes. The conservatives made it seem as if the word ‘taxes’ was toxic, and everybody stayed away from it.”

Despite this anti-tax history, California voters approved Proposition 30 (“Prop 30”) by more than a 10-point margin. The measure steepened the progressivity of California’s marginal tax rate, increasing the rate anywhere from 1 percent on taxable income between $250,000 and $300,000 to 3 percent on taxable income of at least $500,000 (since the pre- Prop 30 rate on taxable income above $1 million had, at 10.3 percent, been 1 percent higher than the rate for any other bracket, the 3 percent increase to 13.3 percent meant that the tax treatment of such income remained in a class by itself).  Prop 30 also increased the state sales tax to 7.50 percent from 7.25 percent. The high-earner income tax increase will automatically expire in seven years; the sales tax increase in four. All revenues will go directly to public education, with 89 percent earmarked for elementary and secondary schools and 11 percent for community colleges.

Citing California’s historic status as a national bellwether for state fiscal policy direction, California advocates for increased government services and the revenues to pay for them are hopeful the passage of Prop 30, like the passage of Proposition 13 before it, represents a turning point in the national mood around taxes — this time in the direction of greater acceptance of the idea that taxes are vital to the successful functioning of government.

Fred Glass, however, warned that Prop 30 will only become a turning point if Democrats and progressives through the country consistently recognize it as such. “If in other states and other places people don’t do what we did because they’re still afraid, then it will be a one-time deal.”

Remapping Debate spoke with many of the individuals who helped develop the various messaging tactics used on Prop 30’s behalf.  We found five key messaging techniques as well as the concern, as Sabrina Smith, the deputy director of California Calls, a progressive coalition of community-based organizations and other partners, put it, that “there is a real tension between messaging to win campaigns, and messaging that fundamentally changes public perception over the long-term.”

Technique 1: Make the need real

Dan Newman, a partner at SCN Strategies, the firm that ran Governor Brown’s “Yes on 30” campaign, believes the first key to Prop 30’s success was that voters had a visceral sense of the need for more revenue.

“People were living it,” he told Remapping Debate. “Students had been paying double digit tuition hikes…Class sizes were among the biggest in the country. Arts and music classes were just eliminated. They’d seen good teachers be laid off. Summer vacation kept getting extended.” The need for revenue was “an absolute concrete thing that [voters] got, they understood. They really felt it tangibly.” Newman’s firm designed advertising that reminded people of this need (see sidebar entitled “How ‘Yes on 30’ ads made the case”).

Mark Baldassare, the president and chief executive officer of the non-partisan Public Policy Institute of California, agreed. He believes the decision to tie the tax increase to education funding was “hugely important” because “the one area where voters are least likely to want to see cuts in state spending [is] schools.” (California’s budget had been structured such that the passage of Prop 30 was the only way to avoid triggering automatic cuts to state education funding. This structure created a real sense of danger and urgency in the electorate.)

Technique 2: Explain the tax clearly

Fred Glass believes that as long as there is a real need, people are likely to support a tax if campaigns clearly and simply communicate “who the tax is on, what the tax is for, how much it is, and the benefits it would bring to everybody.” Prop 30 contained two different taxes — the progressive income tax and the sales tax. Each tax required a different strategy.

The most successful messaging strategy for the income tax proved to be emphasizing three factors: that it would only affect the wealthy; that it accounted for 90 percent of the revenue generated by Prop 30; and that income-inequality had grown so severe that the wealthy had a moral responsibility to contribute more.