In 2012, California voters approved Proposition 30 — officially titled "Temporary Taxes to Fund Education." The new tax brackets were written to expire in 2018. Voters extended them in 2016. This November, Proposition 3 asks whether to remove the expiration entirely.
Phil and Camille go through what those fourteen years actually produced. Funding did rise: per-student spending increased 14% after inflation, and California climbed from the high 20s to 16th nationally. But two years after Prop 30 passed, the Legislature enacted AB 1469, a CalSTRS rescue plan that pushed school districts' pension contributions sharply upward. By 2025-26 the total contribution rate reached 37.7% of covered payroll — close to 38 cents on every dollar of teacher pay. The Public Policy Institute of California found that rising pension costs absorbed roughly a quarter of the entire pre-pandemic education spending increase.
Then there's the revenue that never materialized. A study published in the American Economic Journal: Economic Policy, built on confidential California Franchise Tax Board records, found that 45% of the expected windfall from the 2012 tax eroded within a year and 61% within two. The surprising part is why: migration explained less than 10% of it. High earners largely stayed in California and reported less income. A separate Stanford team using the same dataset found migration effects near zero, which means the two studies broadly agree on the tax-flight question and disagree about something else entirely.
The episode also covers Proposition 43, the measure whose author is publicly urging a no vote. Assemblymember Buffy Wicks wrote ACA 22, watched it pass 68-2 and 35-1, and has said she doesn't support the policy — it was the compromise that cleared two broader anti-tax measures off the ballot before the June deadline. Understanding it requires going back to a 2017 California Supreme Court ruling about a marijuana dispensary in Upland, and forward to Los Angeles Measure ULA, the mansion tax that has raised about a third of its projection while UCLA and RAND researchers found it reduced housing production by at least 1,910 units per year.
Closing out: the second phase of Orange County's forensic audit into pandemic-era contracts, including the county health director who reprimanded a subordinate for raising conflict-of-interest concerns about Andrew Do, on the reasoning that Do was a lawyer and would know if there was a conflict.
Primary sources throughout — LAO analyses, the peer-reviewed studies, the court opinion, and the audit itself.
Written breakdowns with the documents attached: caunderground.substack.com
Phil's book on California's political economy: www.thegildedstate.com
Instagram and TikTok: @californiaundergroundX: @ca_underground