“Governments should not possess instruments of coercion and violence denied to their citizens.” ~Edgar A. Suter
By Alden Benton
Long before we devised our current system of taxation, Benjamin Franklin once noted, “In this world nothing can be said to be certain, except death and taxes.” Today, Mr. Franklin would probably have something to say about the tendency of temporary things to become permanent.
Proposition 55 asks voters to make something that was temporary, virtually permanent.
California voters approved a measure in 2012 that raised the income tax rates on the state’s highest income taxpayers through 2018 and increased the state sales tax by ¼ per cent through 2016.
Proposition 55 will extend the increased income tax rates until 2030. The sales tax increase will expire at the end of this year.
However, Proposition 55 imposes two new retroactive taxes. Retailers will be charged ¼ per cent of their gross receipts for sales between January 1, 2013 and January 1, 2017. At the same time, consumers will be charged ¼ per cent of the sales price of property bought during the same period. (California Voter Guide, pages 132-133)
According to the California Legislative Analyst, Proposition 55 will raise between $4 billion and $9 billion per year, half going to K-12 public schools and California community colleges. K-12 schools receive 89 per cent of this funding.
Proposition 55 prohibits schools from using these funds for administrative costs. Local districts maintain control of how to use the money from this measure. Decisions regarding the use of Proposition 55 money must occur in open public meetings.
This measure could also result in increased Medi-Cal funding of up to $2 billion per year. If state revenues exceed the annual constitutional spending minimums, 50 per cent of the excess (up to $2 billion) may go to fund Medi-Cal.
Under Proposition 55, budget reserves and debt payments could increase from $60 million to $1.5 billion per year. These numbers depend upon both the economy and the performance of the stock market.
Proposition 55 contains provisions to ensure the revenues raised will be spent properly. “All revenues from this measure are subject to local audit every year, and audit by the independent Controller to ensure that they will be used only for the purposes set forth in this measure.” (California Voter Guide, page 129)
© 2016 A. L. Benton/Independence Creek Enterprises
All Rights Reserved
Follow Alden Benton on FaceBook or
Follow me on Twitter @AldenBenton