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Voters Will Opt to Tax the Rich — If They Know How the Money Will Be Spent

Last year, both Arizona and California voted on ballot initiatives to tax the rich. So why did it fail in blue state California but pass in libertarian Arizona?

A detail of Proposition 15 arguments are shown at a ballot Zoom party to go over measures up for a vote, on October 15, 2020 in Los Angeles, California. (Rodin Eckenroth / Getty Images)

At a moment of stubborn party identification in a nauseating culture war, ballot initiatives are an attractive means of pursuing progressive reforms. Many state minimum wages around the country have been raised through ballot initiatives, despite heavy (and well-funded) opposition by local Chambers of Commerce.

Oftentimes, as in the case of Florida in the 2020 election in which Floridians simultaneously voted both for Donald Trump and a $15 minimum wage, these initiatives pass at a much higher margin than Democratic candidates win. It seems that some people who balk at anyone with a D next to their name on a ballot are willing to support measures often more progressive than many of those Democratic politicians themselves would ever introduce.

In 2020 two remarkably similar propositions were on the ballot in Arizona and California: Proposition 208 and Proposition 15, respectively. Both aimed to increase taxes, in a highly progressive fashion, in order to fund public services — public schools in particular in the case of 208. Contradicting the common stereotypes about the two states — California the liberal bastion, Arizona the libertarian heartland — Prop 208 passed, while Prop 15 failed.

Generalizable lessons should of course be taken with a grain of salt. The margins were close in both cases: 15 failed 52-48 percent, 208 passed 52-48 percent. It’s likely, we would argue, that in a non-pandemic year, when large field operations could have countered opposition propaganda, both propositions would have sailed to victory. In what follows, we attempt not a causative account but simply to lay out some of the key differences between the campaigns and why they might have mattered to voters. While any rigid conclusions should be avoided from this comparison, the differing fates of these very similar propositions nonetheless offer a useful case study for the Left.

Framing a Progressive Tax That Voters Will Support

The essence of Propositions 15 and 208 was the same: tax the rich to fund public services. Prop 15 promised about $10 billion in new revenue, and Prop 208 about $900 million. State revenue for 2019 in California was $188 billion, and in Arizona it was $18 billion, so proportional budget increases (about 5 percent) were at play.

But the two also differed in important ways. Prop 15 was a commercial property tax and Prop 208 an income tax. The former is arguably more progressive: in 1978, California’s Prop 13 based the assessment of commercial property on purchase price rather than current market value, a huge coup for big business. Prop 15 would have simply closed this corporate tax loophole, but enough Californians were convinced that this might begin a trend toward hiking taxes on residential property and, in any event, that ordinary people would feel the downward pressure from a commercial property tax hike. In short, business was able to make a cogent enough argument that all Californians would share in the pain.

Proponents of Prop 208 were very intentional about framing the initiative, in an easily comprehensible graphic, as having no effect on 99 percent of Arizonans. Only individuals earning more than $250,000 a year and households making more than half a million dollars a year — literally the top 1 percent of income earners — would pay. For those making Arizona’s median household income of $62,000, that income floor no doubt seemed very far away. And knowing that the top 1 percent saved about $47,000 from Trump’s tax cuts the year before, enough voters figured the rich could absorb the hit with little consequence.

The “No on 208” campaign, backed by the Arizona Chamber of Commerce, tried hard to frame the issue differently, of course. Their primary argument against the measure was that it would hurt small businesses and force them to leave the state. It’s possible that the failure of the apocalyptic warnings about Prop 206, which raised Arizona’s minimum wage in 2016, inured voters from similar predictions about the economic fallout of Prop 208. Anabel Maldonado, the state director for the Invest in Education campaign (“Vote Yes on 208”), said that the chamber uses the same “bad for small businesses” messaging in such a blanket fashion that voters no longer believe it. According to Maldonado, who worked as field director on the Prop 206 campaign, “They literally used the same argument [about small businesses] word for word four years ago.” But the simple focus on the top 1 percent of individual earners also clearly distinguished 208 from a tax on businesses, making the chamber’s argument a hard sell.

Prop 15 proponents, in fact, knew they had their work cut out for them: members of the progressive tax coalition that backed the measure had learned from prior research that progressive income taxes were more comprehensible and more popular than progressive property taxes, and this is why previous successful “Tax the Rich” efforts — Prop 30 in 2012 and Prop 55 in 2016 — were income taxes. They knew the commercial property tax was going to be a tougher sell but figured that with the exemption on all commercial property worth less than $3 million and enough voter education they could overcome the usual lies from the other side.

Alex Stack, communications director for the Schools and Communities First campaign (“Yes on 15”), believes that misinformation spread about the tax was their primary messaging hurdle. The opposition arguments were such egregious lies, in fact, that a judge had struck them from the ballot arguments in the California voter guide. But unfortunately, according to Stack, “scaring voters about possible homeowner taxes and increased consumer costs” was an effective tactic “during a pandemic when people are suffering financially.”

Corrine Rivera Fowler, policy and legal advocacy director at the Ballot Initiative Strategy Center (BISC), doesn’t think too much should be made of the taxation differences between the two propositions. In her own home state of Colorado, voters recently repealed the Gallagher Amendment, which would have ensured a significant residential property tax cut had it remained in the Colorado constitution. With enough education about the need for a stable local tax base, she believes, voters can see the value in both property and income taxes. She nonetheless believes that pro-business arguments about the trickle-down effects of progressive taxation are very effective in the case of property taxes: “Voters can easily imagine the price of services and rents going up.” In taking aim at the top 1 percent of individual earners, a class of people against which it is fairly easy to mobilize hostile sentiment, Prop 208 didn’t seem to raise these kinds of fears.

Voters Don’t Just Want to Soak the Rich — They Want to Know What the Tax Will Pay For

The other key difference between the two propositions was that Prop 15 was framed as of general community benefit — make the corporations pay their fair share to fund community services — while Prop 208 was strictly focused on education. Though the beneficiaries of California’s Prop 15 were clear enough, and the “Yes on 15” campaign used similar language to that of Prop 208 (“Invest in Schools, Health Care, Public Safety”), the strict focus of Prop 208 on schools no doubt helped clarify for voters that the measure had one clear target.

And a naturally very sympathetic one as well — voters were very aware that Arizona ranked last in terms of per-pupil funding and that teachers were long overdue for a substantial raise. According to Peter Anderegg, the lead campaign organizer working with the Arizona Education Association (AEA), “There are 1.1 million K-12 students in a state with a population of 7.2 million. And elementary, middle, and secondary school teachers make up about 1 percent of that population. So education issues are naturally broad-based and personal.”

Also helpful to Arizona’s 208 was the emphasis on strict accountability for the funds raised — 50 percent would go to teachers, 25 percent to classroom support staff, 12 percent to career and technical education, 10 percent to mentoring and retention programs, and 3 percent to increase scholarships at the Arizona Teachers Academy. Voters liked knowing where the money was going, and this knowledge helped counteract the opposition’s argument that the proposition would essentially create a slush fund for undeserving administrators to give themselves a raise.

They also liked the component devoted to career and technical education, a part that was not included in the 2018 Invest in Education Act. Both the strict accountability and career and technical services components were added to the 2020 proposition after an AEA listening tour — a series of stakeholder meetings with parents, teachers, and community members around the state — which substantially improved the proposition in line with the feedback they received. Maldonado and Anderegg both stressed the importance of these improvements to the measure, which wouldn’t have been possible without the concerted effort of AEA’s listening tour.

The lesson here seems to be that voters don’t just want to soak the rich — they also want to know that the new tax revenue will be used for some very clear, positive social good and also that there are measures in place to prevent “government corruption,” a legitimate enough if overly manipulated boogeyman. According to Rivera Fowler, “voters should always have a clear sense of the social impact of a ballot measure.”

Outspend the Opposition

The simplest explanation for the differing fates of the two propositions is that in the case of Arizona’s 208, proponents spent more money, while in the case of California’s 15, opponents spent more.

The Schools and Communities First campaign was the primary organizational driver of the “Yes on 15” forces. Its main financial backers were the SEIU’s California State Council, the California Teachers Association (CTA), and the “odd bedfellow Chan Zuckerberg Initiative.” However, according to Fred Glass, former communications director for the California Federation of Teachers and organizer with East Bay Democratic Socialists of America’s (DSA) Tax the Rich campaign, since the tax went after older large commercial property holders like Chevron and Disney, it makes sense that Silicon Valley, which already pays close to market value on their commercial property, would be supportive.

Schools and Communities First put together an impressive $56 million for the campaign, but it was not to be outdone by the “No on 15” coalition, including groups like the California Chamber of Commerce, the California Business Roundtable, and the Howard Jarvis Taxpayers Association (a front group for commercial property interests), which raised $61 million. Part of that money went to paying the political consulting firm of Alice Huffman, president of the California NAACP. Not uncoincidentally, the California NAACP came out strongly against the measure, sending reams of deceptive “No on 15” literature out to their mailing lists and giving cover to the chamber’s fallacious arguments about small businesses. Huffman, who earned $1.7 million from five different corporate-backed campaigns this fall, has since resigned her position amid conflict-of-interest backlash.

Arizona’s Prop 208 was supported by the Invest in Ed campaign, the primary sponsors of which were the Arizona Educators Association (AEA) and the nonprofit Stand for Children AZ — like the Chan Zuckerberg Initiative, a curious ally (they support charter schools, they have prominent business partners, they endorse Republicans) but ultimately a very impactful player in the fight for 208.

Though a late campaign spending report from the Arizona Chamber of Commerce revealed that the “No on 208” forces spent much more than initially thought, the Invest in Ed campaign was well financed thanks to AEA and Stand for Children. Through October, the Invest in Ed campaign received $21.6 million, and the No on 208 PAC only $5.7 million. Even with the $8.6 million late disclosure, 208 proponents still outspent the opposition.

Predictably, in the cases of both 15 and 208, the opposition primarily spent their money on TV ads. According to Maldonado, about $2 million was being spent on TV ads by “No on 208” every single week starting in mid-September. Most of the “No on 15” money similarly went to TV ads. Opposition forces are really only prepared to fight air battles. In a non-pandemic year, it seems likely that operational ground games would have dramatically shifted the outcomes in favor of the proponents.

Phone Banking and TV Ads Are No Substitute for a Ground Game

In Stack and Glass’s opinion, Prop 15 would likely have built on the previous successes of Props 30 and 55 had it not been for the pandemic. Schools and Communities First collected 1.7 million signatures (a state record) to get Prop 15 on the ballot. This was the fruit of the work not only of the big financial backers but also smaller coalition members like the California Federation of Teachers (about a third of the size of CTA), California Calls, the Alliance of Californians for Community Empowerment (ACCE), Alliance San Diego, PICO California, and Courage California, many of which had been active together since the initial push for what eventually became Prop 30, a progressive income tax that passed in 2012.

Stack is certain that the remarkable field operation that got 15 on the ballot, deeply embedded throughout the whole state in a large and diverse coalition of groups, would have been a huge advantage were it not for the pandemic. Instead, the campaign could only do phone banking and Zoom events, which likely lacked the daisy-chain effect of typical relational organizing. DSA chapters in the state did hold socially distanced demonstrations and car caravans, but no one canvassed.

The Invest in Ed campaign faced similar hurdles of course. Their primary organizing consisted of phone banks, complemented by some literature drops and text banking. According to Anderegg, texting reply rates were down significantly since 2018, so phone banking was prioritized. However, while the teachers chose not to canvass, which would have sat awkwardly alongside parallel organizing for safe school reopenings, the progressive coalition Arizona Wins knocked on a million doors for Democrats, often opening their raps on the importance of passing Prop 208. According to Maldonado, the impact of new voters registered by Arizona Wins during a presidential election year that saw dramatically expanded voter turnout was huge for Prop 208.

The Lasting Impact of the Arizona Teachers’ Walkout

Even more important, however, were the lasting organization and momentum from the Arizona teachers’ walkout in 2018. The eight-week, statewide organizing blitz leading up to the walkout helped raise the general public’s awareness of the bottom-of-the-barrel statistics on Arizona public schools when compared to other states, elevating the voices of educators and uplifting the concerns of various stakeholders. Arizona Educators United (AEU), which started as a Facebook group to organize teachers, quickly developed a bona fide infrastructure of two thousand volunteer “liaisons” positioned in over 1,200 schools across Arizona. Between the red shirts on people’s backs, red signs in local businesses, and thousands of cars adorned with slogans written on car windows, there was not a corner of the state that wasn’t painted #RedforEd.

Arizona teachers march through downtown Phoenix on their way to the State Capitol on April 26, 2018 in Phoenix, Arizona. (Ralph Freso / Getty Images)

It would be difficult to overestimate the continuing impact of the 2018 walkout on Arizona politics. When AEU launched their Facebook group in March of 2018, about one-third of the sixty thousand educators in Arizona were dues-paying members of AEA, Arizona’s largest teachers’ union. But through careful and intentional organizing of both union and nonunion members, #RedforEd leaders managed to engage an additional thirty-seven thousand teachers into organizing spaces, which led to a total of fifty-seven thousand people taking a strike authorization vote in April of 2018. In the space of eight weeks, basically every teacher in the state was plugged into its largest labor action in recent history. California might have benefitted from a strong coalition of partners around the state, but it did not enjoy the same statewide unity generated by the 2018 Arizona teachers’ walkout.

Later that same year, the Invest in Ed initiative was struck from the ballot by the Arizona Supreme Court on the grounds of “misleading language” (a similar objection was used to strike a health care initiative from the 2020 ballot). Maldonado saw firsthand the effect of this decision: “My mom is a teacher, and I know that it hurt a lot to see it go down the way it did in 2018.” But the organizational gains from 2018 were real. AEA got activated by the walkout, and AEU kept its networks from the upsurge intact. Rather than accept defeat in 2018, the teachers honed the initiative language and came back stronger in 2020, submitting 430,000 signatures in a pandemic year to get Prop 208 on the ballot.

Rivera Fowler nicely summed up both the power and appeal of Prop 208: “Arizona educators did this, and messengers matter.”

Ballot Propositions Are No Silver Bullet

Ever since the 2018 walkout, Arizona teachers have been getting organized, collecting signatures, and talking to voters and the media. The success of Prop 208 is the fruit of three years of tireless work that has sustained education as the number one voting issue in the state. But the fight continues: immediately upon its passage, Prop 208 received challenges in the courts. These have been fended off for the moment, but now Republican legislators have introduced SB1783, which would gut Prop 208 through the creation of a new tax category. Maldonado is proud of the Invest in Ed campaign’s accomplishments but warns that the organizing effort must be sustained: “Prop 208 is step one of a very long fight.”

Stack echoes her sentiment. Despite the defeat of Prop 15, he believes the campaign was a “good first step” toward eliminating California’s commercial property tax loophole. “The opposition paints this issue as a ‘third rail,’ but it’s pretty clear that there is an appetite there to make the big corporations pay their fair share.” The “Yes on 15” forces are not going anywhere: they will be back in future cycles to undo the commercial property pieces of Prop 13, an absurd corporate tax loophole that even Silicon Valley is happy to see eliminated.

Ballot propositions are no silver bullet — they can be effectively countered by local Chambers of Commerce, and even upon passage, they can be undercut by courts and legislatures. But in sidestepping partisan tribalism, they also offer a unique means of focusing on bread-and-butter issues that actually matter to working people, like public education, the minimum wage, and progressive taxation.

These are the kinds of battles that the Left must fight. It also so happens that they are battles that the Left can win.