If voters in California next week reject ballot measures to raise taxes, school districts in the Golden State will be among the first victims of spending cuts – a major concern not only for teachers and parents but also bondholders.
According to the latest polls, support for Proposition 30, the measure Governor Jerry Brown proposed to raise personal income and sales taxes, stands at below 50 percent for the Nov.6 vote. A rival measure – Proposition 38, which would also increase taxes – appears to be backed by even fewer voters.
If Proposition 30 fails, the state government will impose $6 billion in so-called “trigger cuts” that mostly fall on education spending to try to keep its books balanced.