There is an important budgetary bill in the upcoming election, Proposition 55. On its passage or failure depends whether Medi-Cal and education will expand or contract in the immediate future.
According to the Voter Guide issued by the California Secretary of State, if it fails the state will lose $4 to $9 billion in revenue by 2018 when gains under Proposition 30 are set to expire.
Prop. 30 was passed in 2012 to offset budget decreases caused by the recession. The economy has recovered somewhat but is still not as robust as it was before 2007. The loss of Prop. 30 revenue would require cuts to education and Medi-Cal. It is uncertain exactly where cuts would come. Without a doubt there would be loss of teachers and loss of classes offered. Colleges would likely suffer the most since K-12 is mandated.
It is important to note that Prop. 55 increases no one’s taxes. It only maintains the current tax rate in effect. Prop. 30 increased the tax rate only on people with a single payer income of more than $263,000. No one who makes less than that suffers any increase under either bill.
Until Prop. 30 passed, everyone with a single payer income of more than $52,000 paid the same rate, 9.3 percent. When 30 went into effect the rate on incomes more than $263,000 was raised 1 percent, to 10.3 percent. The rate with those with incomes more than $316, 000 was raised 2 percent, to 11.3 percent. And those with incomes more than $526,000, the rate was raised 3 percent, to 12.3 percent.
The Howard Jarvis Taxpayers Association objects to Prop. 55. The tax increase was supposed to be temporary, they say. That is true. Prop. 30 had an expiration date. They also say that it is not needed because the economy is doing better.
Temporary or not, needed or not, budget cuts would hurt education and Medi-Cal at a time when programs have not yet been fully restored since the recession. Many feel those programs should be expanded rather than contracted.
Exactly how well the economy is doing is a matter of debate. Middle- and lower-income earners have been the last to feel the benefit. State revenues, at $100 billion-plus according to the State Controller’s Office, are as high as they’ve ever been. But a loss projected of as much as $9 billion (9 percent) would have a severe effect on health and education.
The issue of whether the wealthy should pay more has both practical and philosophical aspects. Is the income from the increased tax on upper-income levels needed? The prospect of invasive cuts suggests that it is.
How severe is the impact on those who pay the higher rate? It’s easy to say that certain incomes pay X number of dollars more. Less tangible is the benefit to business owners of a healthier and better educated workforce — a workforce, also, that because it is spending less on health and education, has more discretionary money to buy the
products produced in those businesses.
People who are successful in business are to be applauded. Good for you if because or your intelligence and hard work you’ve done well. But you did not do it alone. You used an infrastructure that we’ve all paid for — roads, police, workers, even the military, etc., have all contributed to your success. You have benefited more than the average
person from the system. You have a greater stake in maintaining it. You also, because of your good fortune, can bear the expense of government easier than someone living from paycheck to paycheck.
There are many people, especially since the Bernie Sanders campaign, who feel that some wealth redistribution is not only morally obligated but will have a positive effect on the economy. The burden on the wealthy of Prop. 55 is modest and only maintains what has been in effect since 2012.
We heartily recommend a “yes” vote on Prop. 55.