Taxable Talk

I was reading Simon Winchester's Krakatoa: The Day the World Exploded and came across the use of the word "humongous." In vulcanism, a humongous volcanic event is truly huge. Why am I including this here? Well, Proposition 1B is a humongous bond proposal.

How large? The bond totals $19,925,000,000. Yes, almost $20 billion dollars. That's a lot of money.

Before I comment further, the goal of the bond measure is laudable: fixing California's deteriorating infrastructure. The bond measure will allow needed improvements to highways, seismic safety, public transit, and other infrastructure items.

There are, however, a lot of issues with this measure. First, to repay the bonds will cost $38,900,000,000. Yes, nearly $40 billion dollars. That's double the GDP of Luxembourg. And when bonds are approved, someone must pay for them.

Frankly, I don't see how this measure can be repaid without a tax increase down the road. I hope I'm wrong, but if this measure is approved our grandchildren will be paying for it in 50 years.

Californians will have a long ballot to wade through this November. Over the next few weeks, we're going to review all of the tax-related propositions on the ballot, beginning with Proposition 1A.

This is one of five propositions that Governor Schwarzenegger has placed (with the consent of the Legislature) on the ballot. Proposition 1A would require sales tax revenues collected from motor fuel taxes to be used only on transportation improvements. The measure is supported by the Automobile Club, the Highway Patrol, the state police association, the California Chamber of Commerce, and most legislators.

As Bill Leonard, a member of the Board of Equalization, said, "Proposition 1A will let us get started on the backlog of transportation projects, and it will finally put into practice the will of the voters: the taxes we pay at the pump should go to help improve and expand the roads on which we drive." If you're a Californian, consider this when you make your choice in November.