From Where I Sit - Money in the pot

November 29, 2012

When CNN called the election for President Obama surprisingly early in the evening of 6 November, the crowd in Sproul Plaza went wild. There was cheering, dancing, hugging and, yes, a couple of joints were passed round. True, California had not on that day legalised pot (as had the states of Washington and Colorado). But, hey, this is Berkeley. And Berkeley is another planet anyway.

Two days later, the scene was ironically reversed. For weeks, different activist groups had called for a day of mass action and walkouts on 8 November, protesting imminent budget cuts at the University of California, Berkeley in the middle of this academic year and looming tuition fee hikes of 20 per cent for the next. As The Daily Californian, an independent student newspaper, pointed out, since 1990 the state's contribution to the University of California per student has fallen by more than 60 per cent. Funds from student fees now exceed funds from the state. It was argued that this policy was a clear violation of a key concept of the UC Master Plan - namely, to provide everybody who had the necessary qualifications with affordable public higher education.

But on 8 November, Sproul Plaza, site of the 2011 Occupy Berkeley protests, was relatively empty: few had shown up for the lunchtime rally. This was largely due, it was generally felt, to another victory that had been scored on election day: to the delight of the students and their supporters, Californians had voted in favour of Proposition 30. This raises the state's sales tax by 0.25 per cent for four years and increases tax on incomes over $250,000 (£157,000) annually (or $500,000 joint filing incomes) for seven years. It is expected that these temporary tax increases will generate an additional $6 billion in revenue, which - says Prop 30 - must be spent on education. There will be no immediate budget cuts and no further fee hikes, or so it is hoped. The New York Times calls it simply "shocking good sense". And so thought a majority of Californians who supported Governor Jerry Brown's initiative, which before the votes were cast had met with fierce opposition, well financed by largely anonymous donors.

Election day also gave the Democrats in the nation's most populous state a two-thirds "super-majority" in both chambers of the state legislature, allowing them to raise taxes and tackle the state's legendary budget crisis without Republican consent. As one pundit put it: "The Democrats now have two-thirds at just the moment that they don't need it because the voters just raised taxes for them."

Not exactly. Politicians and observers know that ruling parties with two-thirds majorities are especially vulnerable to their constituencies and core supporters, who will fight over how the new resources should be spent. So any general tax increase without clear spending goals will only provoke infighting. Not so with Proposition 30. Here, the money must be spent on education. By popular demand.

California's move might even serve as a blueprint for how not to go over the fiscal cliff nationally. Poll after poll reveals strong majorities for higher taxes on the rich and super-rich if the money is spent on education, higher education and infrastructure projects. In fact, more Americans back such purpose-defined tax increases than voted for Mr Obama. It seems to be bipartisan "shocking good sense".

Berkeley may be another planet anyway. But some good ideas are not as extraterrestrial as they may seem at first. And what might work on the West Coast might work on a national scale. Or, as they sang in the Sixties, "Don't bogart that joint, my friend, pass it over to me."

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