The Buck Stops With Highway Funding : Voters know the importance of transportation. Apart from that, the tax revolt is as firm as ever.

No sooner had Proposition 111 passed, raising the gasoline tax and breaching the limit on state spending, that the cry went out across the land: The tax revolt is over. Politicians could hardly contain their glee, perhaps because, as John Randolph observed in Congress 200 years ago, they enjoy the most delicious of all privileges, spending other people’s money.

It’s easy to spend other people’s money when the commitments made by government are unlimited, but the taxpayers know from checking their wallets that their resources are limited.

Clearly, we have problems. Not so clear is how to solve them. Many officials believe the solutions of our society’s problems will now be framed by the context of Proposition 111: tax increases earmarked for specific purposes to which the taxpayers assent.

While more money might make a difference for public programs, those advocating tax increases as solutions usually stop after examining only one side of the equation. The other side is: What can the taxpayers afford?

John Kirlin of the University of Southern California reports that real per-worker income in California peaked in 1972, and has not been matched even in our current economic expansion. Automobile costs are increasing 33% faster than the average income, Kirlin says; medical costs are soaring 50%.

Given these realities, there will be little support for more tax increases.

The results of the Proposition 111 vote were tied to the specific circumstances of California’s transportation needs: The state’s otherwise healthy economy was threatened with heart failure if the roads and highways, the veins and arteries of the economy, got any more clogged.

However, the victory for 111 opens the door to schemers who will want to raise taxes for specific programs. The earmarking strategy has been pushed by (among others) Gov. Mario Cuomo in New York and Stuart Eizenstat, Jimmy Carter’s domestic-policy adviser.

If successful, this grand strategy will increase the tax burden, for the new revenue would be added to what is already being collected for these needs, with no reduction in the general tax. Earmarking funds makes sense when there is a true user fee, such as the gas tax, which goes for transportation purposes. But the argument falters when applied to other uses. Is a candy tax to pay for more teachers a user fee? Is a business tax for homeless shelters?

Earmarking shuts the Legislature out of the process of determining and balancing needs, targeted taxes can easily be turned to other purposes. Proposition 117 on the June ballot moved some of the tobacco tax to wildlife conservation, not exactly the purpose advertised when the tobacco tax passed in 1988.

Now that the voters have offered $15 billion to solve the transportation problem, the economy will continue to produce many tax dollars. But $15 billion is one big chunk of change. Any additional cries for taxes and government spending must be resisted. Society’s problems must be met with creative solutions and belt tightening. Government must learn to work from a budget as do the people it represents.

Privatizing some government services is a promising answer. In Los Angeles County, privatization experiments have saved the county $193 million. Taking privatization statewide is the next step. Among many recommendations, the Reason Foundation has pinpointed the rising costs of prisons in the state budget, and estimates privatization could save $210 million.

Enterprise zones have been discussed for years to help the poverty of inner cities, but reforms are needed to make the incentives of those zones work--to make it more palatable to get off welfare and get a job.

The business community must respond with a sense of noblesse oblige. Business, critical of the educational system in this country, knows that productivity depends on an educated work force. Business should respond by offering assistance to schools, a trend that has already begun.

A vote to increase the gas tax does not indicate that a great change is occurring in the voters’ feelings toward taxes in general. The tax revolt did not end with the passage of Proposition 111. The next wave of the tax revolt will produce innovative ways to deal with our pressing problems without creating a new problem: the death of incentives and the slowing of the economy, both stifled by increased taxation, which brought on the tax revolt in the first place.