New Taxes

Due to Prop 13, Californians must vote on all new taxes. This was part of the “taxpayer revolt” led by Howard Jarvis in the 1970s. It was designed to limit new taxes by forcing all new taxes to go to a popular vote. The analysis of Prop 13 at the time was telling: it predicted massive shortfalls in public funding for schools and local governments. Indeed, this prediction came true. It’s one of the reasons that the University of California system is no longer free, and why our primary education system is so bad.

We prefer to vote for new taxes because in a healthier democracy these taxes would be imposed by the legislature. By the time the tax makes it to the ballot, it already has support from lawmakers and we should respect that process by having a strong bias in favor of the new taxes.

When we say “preferably without a set-aside,” we mean that we prefer new taxes to go to the general fund. Public money in the general fund can be appropriated during the regular budgeting process and can thus be directed towards whatever is pressing. Budget set-asides, in contrast, are reserved for the particular cause and cannot be used if the city experiences a budget shortfall. During the next recession, for example, we will be forced to spend tax money on trees and arts subsidies instead of school children and infrastructure.