In order to fix an over $40 billion state’s deficit, since April 1, the percentage of sales tax in California has increased from 8.25 percent to 9.25 percent here in San Mateo.
According to an article from the Associated Press, in addition to the increase of the sales tax, the personal income tax rate will be increased by .25 percent, and a .5 percent increase will now be charged to register a car.
“Because the state has to balance its operating budget whenever there is a recession, tax revenues go down, the state has to raise taxes or cut spending,” Economics professor, Masao Suzuki said. “It has done this every recession that I can remember.” This tax increase is known to be provisional, but if the state’s current goal of $ 5.8 billion is not met by its expiration date in July 2011, it could be prolonged. May 19 is scheduled to be a special election dealing specifically with the tax increase. If voters in California decide to support it, then chances are that the increase will become permanent.
“It has had a negative impact on my life, I am spending more money and have to cut on other types of spending,” Skyline student, Henry Chu said.
According to Suzuki, the rise of taxes will not change the economy positively or negatively, it’ll only help the state balance its budget. He mentioned that the state has two options, to either raise taxes or have additional spending cuts, in this case education. “Raising taxes actually has less negative impact than cutting spending, but who gets affected differs,” Masao said.
Students around the campus are experiencing the change in many different ways. While most are concerned with the tax raise, some haven’t even noticed it.
“It has not had an impact in my life, and I doubt that it will because I have not even noticed it,” Skyline student, Joseph Luaulu said.
Surprisingly, many people are unaware of the tax increase, chances are that they don’t check their receipts or just have not made any big purchases.
“The effect is there, and it will always be, but some might not even notice it unless they are buying an item of a big ticket price,” Masao said.
At the campus bookstore, only employees are the ones to notice this increase. According to the student assistant, Sarah Torrigino, students and faculty are not complaining as much. Even though she thinks it is a big difference, many students just expect it. Even though there are some small changes at the campus, it’s believed that it can get worse and it can have a bigger impact on students as well as faculty.
“It might be a big jump on enrollment,” Masao said. “Since many high school students might get rejected from CSU and UC, they will most likely attend community colleges. Luckily we did not get cut, but we do not have enough money for bigger classes.”