Taxable Talk

Proposition 5 is one of the few non-bond initiatives that could impact taxes on this year’s California ballot. Proposition 5 changes sentencing for drug offenses, which may be good or bad depending on your views.

It definitely impacts taxes, though. The initiative allocates $460 million to expand treatment programs for drug offenders; it increases costs by over $1 billion for expanding drug treatment and rehabilitation programs. It may also save over $1 billion by decreasing prison and/or parole operating costs.

Proponents argue that it will increase treatment programs, decrease prison overcrowding, and save money. Opponents argue that it shortens parole for some violent drug offenders, would cause damage to schools, sets up two new bureaucracies, and increases social costs.

This is a very complex proposition that deserves perusal before you vote.

These three propositions do not directly impact taxes. Proposition 4 would mandate a waiting period for 48 hours before a minor could have an abortion. Proposition 8 would ban same-sex marriage. Proposition 9 adds victims rights to matters relating to parole.

None of these three initiatives directly impact taxes. They are, though, important matters that you should review (if you’re a Californian). Remember to vote on November 4th.

Yet another bond proposal. This one would raise $980 million in bonds to help children’s hospitals. The downside is that it would cost taxpayers $2 billion per year over $30 years to repay the bonds.

The bonds would be used at msot of the children’s hospitals in the state. Proponents argue that children’s hospitals could use the money to expand and help more children. Opponents argue that the state is in debt, and that hundreds of millions from an earlier version of this proposition (Proposition 61) remain unspent.

Remember to vote on November 4th.

Proposition 2 would change animal agriculture, a major industry in California. It would impact not only cattle and chickens but eggs and some other industries.

Proposition 2 would require more “humane” handling of animals. This sounds innocuous, but it’s not. I worked in agriculture (citrus, not animals) for many years. Should this measure pass it would increase prices for eggs, would likely increase prices for beef, chicken, and veal, and would eliminate any expansion of those industries in California. In fact, the most likely result would be a movement of jobs from California to nearby states (and perhaps to Baja California).

Proponents of the measure state that this would be more humane to the animals, improve safety, and help family farmers. Opponents believe that this measure could negatively impact public health, would increase costs, and would decrease jobs.

It’s time to begin our study of the ballot measures on California’s ballot in two weeks. I will be continuing my series on the presidential candidates—my article on John McCain will be up later this week. For now, let’s look at Proposition 1A, the Safe Reliable High-Speed Passenger Train Bond Act.

If this measure passes $9.95 billion of bonds would be sold by the state, costing about $19.4 billion over thirty years (or around $667 million a year). The bonds would be used to construct a high speed train from Los Angeles to San Francisco.

Proponents argue that passage would lead to a safe, high-speed train system to link the state. Opponents argue that this would be a huge cost to the state, and would run in red ink. The Legislative Analyst estimates that annual operating costs would exceed $1 billion, so that too must be figured in.

After the arguments were written the financial credit crisis occurred. That’s not mentioned by either the proponents or opponents, but you need to consider it. The ability of any government to issue bonds has been reduced; it’s likely that borrowing costs would be higher—potentially much higher—than estimated. I am very unconvinced about ridership claims; train service in the United States has to be supported by the government in order to continue.

No matter what you think, do make sure to vote on November 4th.

Note: Proposition 1 (listed in the original Voter’s Guide) was removed from the ballot and replaced by Proposition 1A (listed in the supplemental Voter’s Guide).