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Will Decide Fate Of Tax Increases

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In a "no new taxes" political climate, voters in two states will be asked next week to decide whether large-scale education-reform and children's initiatives are worth the price of added sales taxes.

In Michigan, where legislative action on school reform has been put on hold until questions of funding equity have been settled, voters will face two ballot referenda--each with a different sales-tax equation--that could add new funds to the education coffers.

And in Washington State, the fate of a massive "Children's Initiative" will depend on voter disposition toward a tax-increase plan that would raise an estimated $360 million for a wide range of services for children.

Campaigns in both states have been contentious, producing divisions among educators, controversial advertising, and, in one instance, accusations of dishonesty. And supporters of the ballot initiatives concede that winning voter approval will not be easy.

"It appears at best to be a tossup," said Ronn Robinson, education adviser to Gov. W. Booth Gardner of Washington.

State Senator Dan L. DeGrow of Michigan said that low voter turnout and effective campaign tactics against that state's two initiatives may make it "difficult for both proposals" to garner enough support for approval.

Even though the second of Michigan's ballot proposals would provide property-tax relief, supporters agreed that sales-tax increases in any guise are no easy item to sell.

Referenda on education issues will also appear on Texas and Maine ballots next Tuesday, but they are attracting far less interest than those in Michigan and Washington.

Technically, both Michigan proposals to raise the state sales tax could win approval. A ballot proposal need simply win a majority of votes cast to become law.

Should that happen, however, reaching accord on which proposal is to take effect could become a sticky legal question. Most officials believe the proposal winning the most votes would take precedence, but they concede there might be complications.

Proposal A on the Michigan ballot would raise the sales tax by 0.5 percent, to 4 cents, and require that the resultant $400 million in revenues be earmarked for education.

Proposal B would raise the sales tax by 2 cents, but would also revamp the state's property-tax system. It would devote three-quarters of the sales-tax increase to property-tax relief, and create a statewide property tax to help narrow the spending gap between rich and poor districts. Proposal B also would provide some $325 million in direct aid to schools.

According to a poll commissioned last month by Speaker of the House Lewis N. Dodak, who supports the first initiative, Proposal A is favored by 52 percent of Michigan voters, with 33 percent opposed and 15 percent either undecided or "leaning" one way or the other. The corresponding figures for Proposal B are 43 percent, 37 percent, and 20 percent.

Proposal A enjoys broad support, including that of Gov. James J. Blanchard, some of the state's largest corporations, and the 115,000-member Michigan Education Association.

The Promote Michigan Education Committee, an umbrella group favoring Proposal A, has raised about $3 million, most of which will pay for television advertising, said Daniel Fugate, a spokesman for the committee.

By their own admission, supporters of Proposal B have been less visible. "We quite frankly don't have the resources Proposal A has," said John Morris, campaign director for Proposal B. His group is relying, he said, on "a person-to-person campaign."

Educators in Michigan are divided over the question of which proposal will foster more long-term equity under the state's school-finance formula.

According to a study by the House Fiscal Agency, Proposal B would go further toward narrowing per-pupil spending disparities among districts. But some educators and backers of Proposal A disputed that conclusion.

"Neither one of these proposals provides equity," said Ann Graham, an mea lobbyist. "We're skeptical about what they're saying about Proposal B on the equity question."

The mea and the Michigan Federation of Teachers are at odds with some other education groups over the ballot measures.

The state school-boards association, organizations representinggroups of districts, and administrators' and principals' groups support Proposal B. The teachers' union's official stance on Proposal B is neutral.

The debate over the two proposals has produced some lively encounters. In one, a group opposing both referenda attempted--unsuccessfully--to win a court order preventing the pmec from airing television advertisements, which it claimed were not truthful.

Mr. Fugate of the pmec termed the charges "ridiculous."

But the publicity surrounding the incident, said Mr. DeGrow, chairman of the senate's K-12 appropriations committee, "has had some negative effect on Proposal A."

Washington State's Children's Initiative, which was first advanced by a grassroots citizens' coalition, seeks to raise $360 million annually for a wide range of services. About half of that money would go toward educational programs such as dropout prevention, expanding early-childhood education, and reducing class sizes. The other half would be budgeted for welfare and social-service programs.

To finance the initiative, the ballot measure offers the legislature the option of "equitably" increasing any state taxes, or enacting new ones. If lawmakers fail to do either, an automatic 0.9 percent increase in the state sales tax would go into effect on June 1, 1990. The sales tax rate would be 7.4 percent.

Debate on the proposal had been relatively quiet until last week, when a controversy over its wording raised the public discourse a few decibels.

According to some Republicans in the state, the vague wording of the proposal leaves open the possibility of expanding, as well as increasing, the state's sales tax.

Currently, food and medicine are exempted from the sales tax. But Lance J. Henderson, a spokesman for the state Republican Party, claimed that "because of this serious drafting error, they could apply a sales tax on food and medicine."

"That's a bald-faced lie," responded Bob Maier, a lobbyist for the Washington Education Association.

Governor Gardner, in a statement released last week, said that the initiative "will not extend the sales tax to any items presently exempt."

Another official acknowledged the error, but said he thought the legislature could correct it "fairly easily."

Neither side was willing last week to predict whether the Washington measure would pass.

While opponents of the initiative represent a "diffuse" group with less money than the proposal's backers, Mr. Henderson noted, history may favor them.

"Generally, tax increases of this magnitude haven't been viewed very favorably by the voters," he said.

Supporters of the initiative, however, pointed to their $300,000 advertising campaign and the fact that the initiative was for children as factors in their favor.

In Texas, meanwhile, voters will pass final judgment on several education-related measures the legislature approved earlier in the year. Such voter approval is usually routine.

Maine voters will accept or reject a proposal to increase capital funding for vocational schools, and another measure asking for money for asbestos removal.

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