The LA Times reports that Proposition 30 in California is now likely to fail. The University anxiously sits in a holding pattern waiting to know whether the dedicated revenue that this tax increase would provide will arrive. If this Proposition fails, then all hell will break out and tuition could rise by 20%. The quality of education is likely to suffer. While I have no “inside knowledge”, I have been concerned that the University has had an incentive to only slowly adapt to the changing fiscal realities because if it is too pro-active this would be “rewarded” with even larger state fiscal cuts. If University fiscal folks anticipate full crowding out of any privately raised funds, then why devote great effort to change the university’s revenue sources?
Why are tax payers unwilling to support the children? One possibility is low trust in government. If Governor Brown could commit that the $ raised would not go to “high speed rail” but would be spent on education, would that increase political support? Do opponents not like the prioritized public goods or do they believe that government is too inefficient in spending collected revenue? How is trust in state and local government built? Another possibility is based on Jim Poterba’s work from long ago.
Switching subjects: For those who like youtube videos about environmental economics, my new series may interest you! The good news for you is that the videos are short and you don’t see my face!