Molly Munger, whose Proposition 38 tax increase is up against Gov. Jerry Brown's Proposition 30 tax increase on the Nov. 6 ballot, was sitting in her beautiful Pasadena home one fall day last year when her private pollster emailed her some fresh survey results. To her great surprise, they showed a major shift in the state's anti-tax zeitgeist, with 57 percent of California voters willing to back a tax hike to fund schools.
For months, Munger had been quietly working with her close friend, Los Angeles civil rights attorney Connie Rice, and the Advancement Project, a 14-year-old civil rights advocacy group that Munger and Rice co-founded, on ideas to raise new money for California's troubled schools. They drew up a "mock" ballot initiative and tried it out on focus groups in cities like San Diego, Riverside and San Jose, and the detail-oriented Munger watched the discussions live from her home via a computer feed.
The Advancement Project group became convinced they had a winning idea: Modestly increase state income taxes for all Californians on a sliding scale so that everyone has skin in the game, then funnel those billions of dollars directly to classrooms — explicitly bypassing the widely distrusted California Legislature, whose approval rating hovers at 21 percent.
Munger was an utter unknown on the California political scene, but her mock initiative wasn't just a dreamy exercise in "what-ifs." The self-assured, 64-year-old lawyer, who looks far younger and sports a platinum-blond coif, is fantastically rich; her billionaire father, Charles T. Munger Sr., is billionaire Warren Buffett's business partner.
If multimillionaire Molly Munger felt like it, she could take that mock ballot before voters. She could be the first woman in California history to underwrite a key statewide ballot measure, a longtime tradition among the state's very rich.
Munger had an "a-ha" moment as she read the email from her seasoned pollster, Mark Mellman. Californians, who for years have rejected every statewide tax placed before them, were changing their minds — as long as the taxes actually went to public schools, which lost $7 billion between 2007 and 2011, thanks to state cuts.
"There was almost a stewardship that settles down upon the mind," recalls the casual and elegant Munger. "Like, 'Do you really want to have been in a position to move this forward at a time when it's desperately needed — and you didn't?'"
Munger and her husband, Steve English, a top litigator, knew that trying to pass a statewide measure would cost the two political neophytes tens of millions of dollars (they've spent $33 million so far). But Munger and English were all in. "People who are fortunate enough to have a higher income," English says today, "have a particular responsibility for that blessing to be given back."
However, just days before the election, Munger's $10 billion tax plan has the support of only 41 percent of voters. Only one of the two competing tax measures, Gov. Brown's Proposition 30 or Munger's Proposition 38, can become law. To pass, one measure must be approved by more than 50 percent of voters, as well as winning the most total votes.
Brown's measure is stumbling, suffering in part from amateurish and self-inflicted wounds. Munger officially filed her tax plan in November 2011, far ahead of Brown, who was fighting off a powerful teachers union that wanted him to hit the rich harder. Brown eventually compromised with the union — but the delays left him filing his tax plan quite late, in mid-March. He then slyly got the legislature to pass a custom-designed law that changed the rules, placing his late tax, instead of Munger's early one, at the top of the November ballot. Munger tried to reverse that in court but lost. (History shows that lazy voters often choose the first ballot measure they read.)
But then, Brown had let the entire summer slip by without putting his face on Proposition 30, and he's now being quietly criticized within stressed-out Democratic circles. David Townsend, a veteran Democratic consultant in Sacramento, says Brown had no choice: "As soon as the [legislative] session was out, he had to veto a couple thousand bills, so once he finished that, he [was] on the campaign trail. I don't think it's a lack of commitment on his part, but ... he had to do his governor job."
Perhaps. But by late September, Proposition 30's support had eroded to a bare 51 percent in the Field Poll. (This despite $52 million pouring in from huge special-interest backers as of mid-October. No on 30 has raised $32 million.) Just after that poll, the governor's camp made a poor judgment call, airing TV ads that plainly lied about who would control Brown's $6.8 billion to $9 billion in new tax revenue annually.
Dozens of media outlets immediately labeled the ads "misleading" after the spokesman, 2012 California Teacher of the Year Tom Collett, claimed that Brown's taxes would go to schools and "can't be touched by Sacramento politicians." Brown suffered days of bad press.