A Tax on Prisons to Pay for Prevention

A Tax on Prisons to Pay for Prevention

Later this month, the Revenue and Taxation Committee of the California Legislature will consider Assembly Bill 43—the State Incarceration Prevention Fund. 

The bill’s author, Assemblyman Tony Thurmond who represents the state’s 15th Assembly District, spoke openly about what motivated him to author the legislation as well as the bill’s intent. 

Thurmond shared how, after watching the film 13th, the 2016 documentary by Ava DuVernay that examined the intersection between race justice and mass incarceration in America, he was troubled to learn how inmates are being used like slave labor. “We shouldn’t have private prisons but since we do,” Thurmond asserted, “The people who benefit and profit should give back.” 

“AB 43 would redirect money generated by companies profiting from the prison industrial complex into an incarceration prevention fund, Thurmond advised. “A tax would be assessed on companies that contract with state prison facilities to provide goods and services and those dollars would then be used to fund programs known to reduce incarceration rates such as pre-school and after school care.” 

Thurmond stressed his desire to always be solutions driven. “This bill attempts to do two things,” he continued. “First, we put serious action behind California’s stated intention to reduce our prison population by funding critical programs that have proven to reduce incarceration rates.” 

“Second, we endeavor to provide a revenue stream for early childhood education outside of the budget so as to insulate these programs from budgetary fluctuations. We estimate that a 10 percent tax on these contracts in FY 15-16 would have generated $150 million dollars.” 

“We think this bill has major social justice implications,” he added. “It places a tax on private prisons and private companies who profit off prison related services.” 

Recognizing the passage of any tax measure in California requires a two-thirds majority approval in both the House and the Senate before it can proceed to the governor’s desk for final authorization, the Assemblyman was asked why he sought to move this groundbreaking legislation through such a difficult legislative process? Why not structure it differently so it would not require the two-thirds approval required for new taxes. 

Thurmond purposely selected the tax structure because, as he explained, it works well for this initiative for two reasons. By presenting the legislation as a remitting tax as well as an urgency measure (which also requires two-thirds majority approval), the bill, when approved, can go into effect right away. This is because urgency measures can be effective as soon as they are approved. 

The language in the bill is also structured to prevent prisons from writing the cost of the tax into their contract in an attempt to pass the expense back to the state. 

If AB43 succeeds, California will be the first state in the union to implement such an innovative, groundbreaking and holistic approach to funding critical programs proven to reduce incarceration rates; while at the same time, providing a revenue stream for early childhood education that is outside of the budget. The Revenue and Taxation Committee hearing for AB43 is scheduled for April 24.

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