Fed up with a chronic shortage of skilled labor, Silicon Valley leaders are spending millions of dollars and twisting arms in the fight over two controversial education reform measures on California's November ballot--a fight that in many cases is pitting high-tech advocates against one another.
At the center of the education controversy is the so-called Draper initiative, Proposition 38. Written and funded by Draper Fisher Jurvetson venture capital partner Tim Draper, who has pledged to spend up to $20 million of his own money to promote it, the measure proposes to create a school voucher system to provide a yearly payment of at least $4,000 to parents who send their children to private schools.
Despite its high-tech pedigree, Prop. 38 has become a lightning rod for anti-voucher critics in Silicon Valley and has galvanized opposition even from some high-profile supporters. A second education reform initiative, meanwhile, has garnered a wider base of high-tech support and has touched off a rivalry between the two initiatives' backers.
Proposition 39, which would make it easier to pass local school bond initiatives by lowering required voter majorities to 55 percent from two-thirds, has enjoyed broad support from technology executives and corporate boards. But that measure has drawn pockets of high-tech fire as well.
Prop. 39's co-chairs are Cisco Systems chief executive John Chambers, venture capitalist John Doerr and former state board of education member Reed Hastings. Together, the three have given upward of $5 million of their own money toward the effort to pass Prop. 39.
Doerr has pledged to raise $30 million for the proposition and is two-thirds of the way toward that goal, according to Hastings. More than three-quarters of that money has come from the technology industry.
The brisk commerce in donations and endorsements for and against both measures comes as the high-tech industry, both at large and in California in particular, struggles to cope with a perennial shortage of skilled workers. The industry has thrown its weight most visibly behind efforts on the federal level to increase the number of foreign skilled workers allowed to work in the United States through H-1B visas.
But high-tech business advocates acknowledge that increasing the supply of foreign workers can do only so much toward easing a skilled-labor shortage with deep roots in the nation's educational system.
"Education is an issue of paramount concern in the high-tech industry across the board," said Margita Thompson, director of California operations for the National Venture Capital Association and a representative for TechNet, a political advocacy group. "But the industry realizes that H-1B is a short-term solution, and the long-term solution is education reform."
A Silicon Valley Who's Who
Technology companies and coalitions that have lent their endorsement to Prop. 39 read like a Silicon Valley Who's Who directory. They include Adobe Systems, Advanced Micro Devices, Autodesk, Broadcom, Chase Hambrecht & Quist, Hewlett-Packard, Intel, National Semiconductor, Novell, Qualcomm, 3Com, the Silicon Valley Manufacturing Group, the Software and Information Industry Association, Barksdale Group partner and former Netscape chief executive James Barksdale, Handspring chief executive Donna Dubinsky, and Marimba chairman Kim Polese.
TechNet, which counts Doerr as a founder and co-chair, has officially endorsed Prop. 39. The group has not taken a position on Prop. 38, citing a lack of unanimity among its membership.
"It's an amazing phenomenon that you've got a pro-education, pro-public
that's substantially funded by business," said Hastings, now the chief
NetFlix.com, a Web site that rents DVDs.
"Normally, pro-public education initiatives are funded by the education establishment--the unions, the school boards. The fact that John Doerr is leading a $30 million effort reflects a seismic shift in Sacramento that would have been unimaginable five years ago."
The influx of high-tech money and interest has taken some in Sacramento by surprise, as technology interests move from the wings to the center stage of California politics.
"Silicon Valley's view on education is challenging for those of us in education," said John Hein, director of government relations for the California Teachers Association, the state's predominant teachers union. "But theirs is a collaborative approach that we have welcomed, and they're obviously playing a significant role. Prior to this, they have not really been engaged."
The lesser of two initiatives?
While Prop. 39 has won broad-based support, Draper's measure has struggled to gain traction.
Anti-Prop. 38 groups cite the opposition of traditional voucher opponents, including President Clinton and California Gov. Gray Davis, as well as vice presidential candidate Sen. Joseph Lieberman, widely seen as a high-tech business advocate whose support of vouchers has put him at odds with running mate Al Gore.
Also opposing the measure are Bay Area business groups including the San Jose Silicon Valley Chamber of Commerce and the Silicon Valley Manufacturing Group.
Proponents of Prop. 38 say vouchers will stimulate private schools, which in turn will produce the kind of graduates required by high-technology employers.
"Right now our public school system, because of its inefficiency, is not readying California with the highly educated work force that we need," said Gary Larson, a representative for the Prop. 38 campaign. "Private schools are traditionally more educationally innovative and are quicker to implement teaching programs that reflect technological advances. Vouchers give every parent the option to choose between this and the current failing public school system."
Opponents fault the measure for providing an across-the-board voucher credit rather than a means-tested credit that would exclude wealthy families. A means test, some argue, would have made Prop. 38 more palatable to many who otherwise would have been disposed to favor a voucher initiative.
Some lay the blame for that and other strategic failures at the feet of Draper.
Draper "has a heart of gold and wants to do well but has a fairly poorly drafted initiative on a controversial idea--and that's a lethal combination," said Hastings, who describes himself as a longtime personal friend of Draper's. "The controversy behind the idea of vouchers means you need to really line up all your ducks, but drafting problems mean many people in the voucher community are going to vote against the initiative."
Hastings said he has repeatedly urged Draper to withdraw his support for the measure, arguing that it has little chance of winning and threatens to siphon funds that might otherwise go toward passing Prop. 39. Draper has responded that he thinks his measure can still win, according to Hastings.
Other industry insiders who asked not to be named also faulted Draper for his tactics, saying the venture capitalist took a single-handed approach more suited to an investment opportunity than to the kind of coalition-based strategy that would have benefited a statewide political campaign.
Draper could not be reached for comment. But his campaign defended both the measure and the organization promoting it.
"Prior to the initiative process, we did polling that indicated that people thought vouchers shouldn't pick and choose winners, that it should be universal rather than means-tested," said Prop. 38 campaign representative Gary Larson. As for the breadth of the campaign's support, Larson said the proposition had 200,000 volunteers "on the ground" supporting it.
High-tech dollars may not buy results
So far, technology money has had mixed results in swaying the electorate.
On the Prop. 38 front, Draper has so far failed to show much bang for his megabucks, with the voucher measure down by double digits in recent polls. A Sept. 19 poll found that 37 percent of
Californians favor the measure, with 53 percent opposed and 10
percent undecided, according to the Public Policy Institute of
California (PPIC). A Field Poll published Aug. 29 also found the measure with a double-digit deficit, with 36 percent supporting and 49 percent opposing it.
By contrast, technology money appears to be favoring the winner in the battle over Prop. 39. The bonds initiative has the support of 49 percent of voters, according to the Sept. 19 PPIC poll, with 37 percent opposing the measure and 14 percent undecided. The Aug. 29 Field Poll showed 48 percent in favor, 31 percent against and 21 percent undecided.
While Doerr and his allies have lined up the lion's share of the region's high-tech companies and executives to support Prop. 39, the initiative is not without its small group of high-tech detractors who are going against the high-tech grain. Opponents fault the measure for opening the door to higher property taxes.
"It's not fair to have the home owners, to have such a small percentage of the population have to pay for some of these ridiculous bond issues," said Al Shugart, founder of Seagate Technology, which he left in 1998 to launch his own management consulting firm for entrepreneurs. "The 'high-tech grain' is wrong in this case. I don't know why the high-tech world thinks this is fair. It's not fair."
Shugart may not be alone among Silicon Valley opponents of Prop. 39. But he is nearly alone among those offering vocal opposition. Apart from Draper and Shugart, the "No" on Prop. 39 campaign cites only Carl Berg, a partner in Berg & Berg Enterprises, a real-estate developer catering to high-tech companies in Silicon Valley, among its high-tech supporters.
Shugart and Berg contributed $250,000 apiece to the campaign to defeat Prop. 39, according to Shugart.
Shugart says high-tech opposition to Prop. 39 is more widespread than it may appear, but that Doerr's vigorous campaign on its behalf may have scared some opponents into quiescence.
"There are a lot of people in this industry with a libertarian bent, and they very much oppose Prop. 39," Shugart said. "But because of the strong backing in Silicon Valley, people who are on our side don't want to take a high-visibility stand. I would say the high-tech community is split."
Prop. 39 follows a similar measure that California voters defeated in the March primary election. Proposition 26 proposed to lower the majority required for school bonds to a simple majority, as opposed to the 55 percent majority stipulated by Prop. 39. Opponents were outspent 20-to-1, Shugart claimed, but still prevailed on election day.