Sample Paper on Proposition 30 -Temporary Taxes to Fund Education

Proposition 30 -Temporary Taxes to Fund Education

Proposition 30 was a ballot measure suggested by California governor to be voted for in 2012 elections in an attempt to prevent California state schools from budget cut, in addition to increasing taxes for a specified period. According to this proposition, taxes for high income earners (individuals earning beyond $250,000 annually) will go up for seven years while sales tax will rise by a quarter cent for four years. Proposition 30 aimed at funding public kindergarten schools up through college learning. The drafter of this proposition targeted college students, who were promised that their tuition fee would not be raised if the motion were passed. Proposition 30 was passed during the last state elections, and its application is expected to raise social, political, and economic well-being through increased funding for education.

Overview of Proposition 30

The California Governor, with the support of the state Legislature, has advocated for a temporary tax increase in an attempt to reimburse the reducing revenues in the state. The General Fund Budget for 2012-13 was $50 billion less than what the state budgeted for 11 years ago. This has compelled the state to bypass Proposition 98, which dictates on minimum spending on K-12 education. The Proposition 30 stated that sales tax rate should be raised by one-quarter cent for every dollar after four years (Proposition 30: Temporary Taxes to Fund Education). This measure was expected to start on January 2013 up to December 2016. The state will raise personal income tax for residents, who earn an annual income of over $250,000, for a period of seven years starting on January 2012.

State General Fund is usually dispersed to support several public programs, which include public schools, universities, health facilities and programs, prison, and other social services. School spending took the largest share in this budget. Upon passing this proposition, the state will be capable of creating a balanced approach toward reducing the budget deficit that comprises of $8 billion in budget cuts and $6 billion as new revenue. The additional revenue collected from temporary taxation would enable the state to fund its programs and, consequently, stabilize its economy. The legislation will guarantee funding for public safety services that are devolved from the state to the local government (Micheli 62).

The California State’s budget for 2012, which was agreed by the Legislature, as well as the governor, assumed that the legislation was already passed, although it incorporated a backup plan in case voters rejected Proposition 30. However, if the proposition were rejected, the budget for 2012-13 would be cut by $6 billion, and will persist up to 2018-19 budgetary year (Proposition 30: Temporary Taxes to Fund Education). Cutting the education budget is likely to affect the value of education negatively in California.

Outcome

Proposal 30 had to undergo a political exercise to convince the residents on its importance. The Budget for the period 2012-13 depended on whether voters would approve this measure. Fortunately, the proposition was passed, thus, enabling the state to go ahead with its plans. Proposition 30 will raise California to a financial stability since the state will generate adequate fund to run its services without incurring cuts on vital public services, such as schools, which are essential for raising the living standards. Since the beginning of the Great Recession, school funding in California has never been stable. Many schools encountered shortage of teachers due to massive layoffs. Students could not afford to meet the fee requirements, which were changing uncontrollably. This legislation will present the state with required income from raising income tax and sales tax temporarily.

On economic perspective, the effect of the Proposition 30 will be felt even in 2018-19 budgets. The tax revenue accumulated from temporary taxation will be allocated to the State’s General Fund. This would enable the state to meet Proposition 98, which advocates for a certain minimum percentage of state’s budget to be channeled to K-12 education. The available fund will permit the state to fund its existing programs and end payment delays in K-14 education. K-12 schools will receive 89% of the temporary tax revenue while community colleges will be awarded 11% of this revenue (Micheli 62). An increase in revenue, even temporarily is likely to help in fiscal management, which, in turn, will keep the state in a better shape when the proposal ceases working.

The acceptance of Proposition 30 led to an increase in sales tax in California State from 7.25% to 7.5% in January 2013. Local municipalities will respond by imposing an additional sales tax on the existing statewide taxes. Income rates for individual who earn less than $250,000 will not change. Only 1% of personal income tax filers are expected to feel the impact of the temporary tax rise. The legislation proposes that collective incomes that exceed $340, 000 would be subjected to the new tax, and shall be reviewed every year in accordance with inflation. The passing of Proposition 30 overshadowed Proposition 38, which also advocated for an increase in taxation. Although the state has encountered financial difficulties recently, the state economy is expected to rebound, and more funds will be available for K-12 schools to spend (Rose 12).

On social view, the provision of Proposal 30 will assist in public safety realignment, since it will create certainty on spending in counties and municipals. The state will also settle other debts using the fund. The proposition will encourage the provision of services that aid in substance abuse, as well as mental health treatment. Services, such as child welfare, have been overlooked due to lack of adequate funds, hence, and increase in tax will boost the lives of California residents. Schools are benefiting from the legislation, and are now in a position for expansion to accommodate more students and minimize fees. Proposition 30 will increase resources in schools, thus, enabling students to attain their academic goals with ease.

Conclusion

For several years, California State had been experiencing a shortage of funds that are directed toward public education, which necessitated the governor to support Proposition 30 on temporary tax increase. New tax revenue advocated by Proposition 30 is expected to increase funding for schools, as well as assist in balancing the State Budget. The State’s General Fund is utilized in supporting myriad of programs that concerned the public, thus limiting amount allocated on public education. The legislation proposed an increase in personal income tax for seven years, as well as sales tax for four years. The temporary tax will restrict the state from cutting on amount allocated to public education and raise the revenue running public education institutions. Although the temporary taxation is likely to affect a group of California residents, it will assist the state to stabilize before its expiry.

 

Works Cited

“Proposition 30: Temporary Taxes to Fund Education, Guaranteed Local Public Safety Funding, and Initiative Constitutional Amendment.” Legislative Analyst’s Office, The California Legislature’s Nonpartisan Fiscal and Policy Advisor, July 18, 2012. Web. 15 October 2014 http://www.lao.ca.gov/ballot/2012/30_11_2012.aspx

Micheli, Chris. “California Voters Approved Major Tax Increases.” Journal of State Taxation 31.2 (2013): 61-63. Business Source Complete. Web. 15 Oct. 2014.

Rose, Heather. “Moving Toward a Coherent School Finance System.” Leadership 42.5 (2013): 12-15. Academic Search Premier. Web. 15 Oct. 2014.