School Bond Measure Supported by Samueli, Conexant, Irvine Co.
You’d be hard-pressed to find a business in Orange County that says it opposes Proposition 26, the measure that would change the state constitution to require only a majority vote to pass school bonds rather than a two-thirds vote.
One of the reasons for this is because the issue has been passionately debated as a for-or-against education measure. Prop. 26 also is viewed mainly as a homeowner concern, rather than a business concern, since property taxes would ultimately increase.
In fact, companies contacted for this story either said they endorsed the school bond measure or had no opinion on it.
Dueling web sites for and against the measure demonstrate this. At www.letsfixourschools.com, numerous businesses are lined up as endorsers, while www.saveourhomes.com shows no business backers.
Polls indicate the issue is a close race with voters.
Even the OCTax organization said it took a neutral stand on the issue due to an evenly split vote by its board of directors. OCTax is generally opposed to new taxes.
Chipmakers’ Backing
In Orange County, Prop. 26 draws support from the county’s two high-profile modem chip makers. Conexant Systems Inc. has given $10,000, while Broadcom Corp. co-founder Henry Samueli has given a $50,000 individual contribution.
The Irvine Company has given $5,000 to the campaign. The Orange County Business Council is also listed as an endorser of the measure, although it hasn’t contributed money to the campaign.
Other endorsers read like a corporate who’s who: the California Business Roundtable, the California Chamber of Commerce, California Manufacturers Association, California Business Alliance, Hewlett-Packard Co., Intel Corp., Walt Disney Co., Lockheed Martin Corp., Quantum Corp. and Apple Computer.
Leading the campaign for Prop. 26 are the California Teacher’s Union and Silicon Valley venture capitalists and high-tech CEOs, who, in contrast to OC companies, have contributed millions of dollars to Prop. 26. The high-tech leaders point to wired and technology-equipped school facilities as educational essentials.
The leading opponents of the measure are the California Republican Party and the Howard Jarvis Taxpayers Association.
In fact, Prop. 26 has been raised as a key issue in OC GOP chairman Tom Fuentes’ bid to stave off a challenge to his leadership from the executive-led New Majority (see story, page 3). He charges that his opponents are motivated in part because of his opposition to Prop. 26. (The New Majority denies the charge, saying its members are on both sides of the tax issue.)
Association Opposes
One of the few business groups on record against Prop. 26 is the California Association of Independent Business.
Another small-business group, the National Federation of Independent Business, has conspicuously taken no position on the measure. State director Martyn Hopper said the group is focused on campaigning for the defeat of Propositions 30 and 31, which would enable trial lawyers to sue defendants’ insurance companies.
Prop. 26 is exposing a big rift between big and small businesses, and between those businesspeople who are across-the-board anti-taxers, and those who are more targeted in their approach to taxation.
Virtually all businesses oppose capital gains taxes, for instance, but some businesses, particularly developers, often favor taxes that fund infrastructure. And companies concerned about having trained workers will often favor taxes that support schools.
Opponents of Prop. 26 counter that the state, communities and schools have received plenty of money and grown just fine under the current two-thirds restriction, which has been in place for more than a century.
Kris Vosburgh, executive director of the Howard Jarvis Taxpayers Association, said big business has the ability to pass on the costs of increased taxes to its customers, whereas homeowners and small businesses don’t.
‘Main Street vs. Wall Street’
It’s really a fight between Main Street and Wall Street, he said.
Kim Conley, lobbyist for the California Association of Independent Business, said passage could significantly hurt small manufacturers because California businesses pay a business equipment tax, which is the same rate as the property tax.
Worst of all, passage of the school bonds measure would set a precedent, she said. “It breaks the two-thirds vote. It opens the door to any kind of tax increase.”
What the corporate community is really concerned about is the alternative,higher corporate taxes, Vosburgh said. “They are looking for ways to increase taxes that impact them the least.” n
