California Taxes the Rich to Save the Schools
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The Fiscal Times
November 7, 2012

Bucking a strong national anti-tax mood, California Gov. Jerry Brown (D) won voter approval Tuesday night for a measure designed to protect public schools and universities from deep spending cuts by raising the state sales and income tax.

By a margin of 54 percent to 46 percent, Californians approved Proposition 30, which will  generate an estimated $6 billion annually by boosting the income tax for seven years on residents who earn more than $250,000 a year and raising the state sales tax by a quarter of a percent for four years.

Brown had said that if the measure failed, the state’s budget would face nearly $6 billion in automatic annual spending cuts that would fall almost entirely on public schools, under the budget approved by lawmakers earlier this year. “It sold itself," Brown told The San Bernardino Sun. “The core reason it brought people together was a belief in schools and universities and the capacity of government to make wise investments that benefit all of us.” Last night at a rally in Sacramento, Brown said, “We have a vote of the people - I think the only place in America where a state actually said, ‘Let’s raise taxes for our kids, for our schools, for our California dream.’”

Proposition 30 was among the scores of hot-button issues resolved by voter referenda and initiatives across the country that were overshadowed by the presidential and congressional election results. Those results suggested growing acceptance of more liberal ideas, including same-sex marriage, legalization of marijuana and gaming.

OTHER REFERENDA RESULTS
Colorado and Washington State became the first states in the country to legalize the recreational use of marijuana, while Massachusetts joined 17 other states and the District of Columbia in legalizing the use of marijuana for medicinal purposes.

Washington State will impose a 25-percent tax on marijuana sales, which is estimated to generate as much as $1.9 billion in state revenue over five years, according to the state’s Office of Financial Management. The provision passed by a vote of 55 percent to 44 percent.

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Colorado’s measure gives the state and local governments the ability to control and tax the sale of marijuana, which the state estimates will generate more than $5 million annually. However, possession of marijuana is illegal under federal law, and both state measures will likely launch lengthy court battles.

“The voters have spoken and we have to respect their will,” said Colorado Gov. John Hickenlooper (D), who had opposed the legalization of marijuana for recreational purposes, in a statement. “This will be a complicated process, but we intend to follow through. That said, federal law still says marijuana is an illegal drug, so don’t break out the Cheetos or gold fish too quickly.”

Same-sex marriage advocates were victorious in four states, including Maine, Maryland and Washington, which became the first three states in the country to legalize same-sex marriage through a ballot measure. Voters have backed constitutional amendments limiting marriage to a man and a woman in more than 30 states, but a constitutional amendment has never before been used to legalize gay marriage. Maine’s Question 1 passed 53 to 46 percent, Maryland’s Question 6 passed 52 to 48 percent, and Washington’s referendum 74 passed 51 to 48 percent.

In Minnesota, meanwhile, voters rejected a constitutional amendment banning same-sex marriage. It is currently illegal for same-sex couples to marry in Minnesota, but a vote to adopt the constitutional amendment would have cemented that ban. Before yesterday, six other states had legalized same-sex marriage through legislation or judicial ruling. Those states include Connecticut, Iowa, Massachusetts, New Hampshire, New York and Vermont.

In Maryland, residents approved a gambling expansion measure, 51 percent to 48 percent, allowing a casino to be built in Prince George’s County, as well as permiting existing casinos to offer table games like blackjack and roulette. The measure was passed by Maryland’s General Assembly in a special session in August, and was the target of an $80 million dollar campaign fueled by casino companies, including MGM Resorts International and Penn National Gaming, according to The Baltimore Sun. Supporters of the measure, including Democratic Gov. Martin O’Malley, say revenue from gambling expansion will go toward education and job creation.

In California, voters rejected a ballot measure known as Proposition 37, which would have required labels on foods produced from or with genetically modified organisms (GMOs). If it had been approved, California would have been the only state in the nation to require the GMO labeling on a broad range of foods.

 

Washington Correspondent Brianna Ehley, based in D.C., covers Congress, government agencies and spending issues, health care, and tax and economic policy for The Fiscal Times.