Last week the state that started the tax rebellion by passing Proposition 13 voted to raise taxes. Golden State voters endorsed Proposition 111, raising their 9-cent-a-gallon gasoline tax to 18 cents over five years. The vote was close–52 to 48 percent–and the funds were carefully earmarked for expansion of gridlocked roads and rail lines. But the symbolism was obvious. “It’s a definite change from the trends in past elections,” said Ted Costa, spokesman for the People’s Advocate, an antitax citizen’s lobby. “It’s the end of the tax revolt,” lamented Arthur Laffer, the guru of supply-side economics. “If California gives up, can President Bush be far behind?”

On Capitol Hill, lawmakers cautioned reporters not to read too much into the California vote. “Raising taxes is not for my members,” says House Speaker Tom Foley. “My members like to cut them.” The polls on raising taxes are “deceptive,” he says. “Sixty percent of voters polled now expect that there’s going to be a federal tax increase–but the same 60 percent say that taxes should not be raised.”

Whether voters like it or not, taxes are going up all over the country. In some ways the California vote merely focuses attention on a basic truth that politicians don’t like to admit, but that most taxpayers have known all along. The Great Tax Revolt of the 1980s was largely a myth. Ronald Reagan’s rhetoric was more impressive than his actions. The Reagan administration’s income-tax cuts were partly offset by increases in excise and other taxes–and by a huge jump in payroll taxes to fund social security. Tax relief has gone mainly to corporations and upper-income earners. Overall, the federal tax bite on the economy only dropped from 19.4 percent of the GNP to 19 percent between 1980 and 1988, and already it has climbed back to an estimated 19.6 percent. “The ordinary man,” charges Rep. Martin Sabo, who chairs the House Democratic Study Group, “doesn’t have anything to show as a result of Reagan’s policies other than a bigger tax bill.”

The tax revolt did succeed in cutting taxes in a few states, like California. But in others, voter-imposed tax caps were riddled with exceptions deemed necessary to maintain essential services. Meanwhile the federal government kept shifting the tax burden back to local governments. In the 1980s local taxes actually increased by 18 percent–from 11.4 percent of GNP to 13.5 percent. “In the states,” says Ron Snell of the National Conference of State Legislatures in Denver, “the tax revolt has usually meant no big new taxes–but there’ve been plenty of smaller ones instead.”

Tax rebels have not surrendered. At least eight new spending-limit initiatives will appear on ballots this November, including one in California that would eliminate big cities’ power to raise any taxes without first submitting the issue to voters. But in the post-Reagan era, more states are facing up to the need to raise taxes. Some 30 states raised revenues last year by about $3.5 billion, usually by hiking gasoline taxes (23 states) or taxes on cigarettes or alcohol (20 states). The overall increase will be at least twice as large next year–perhaps $10 billion, predicts Steven Gold, an expert on local taxation with the Rockefeller Institute in Albany, N.Y.

Some states have no choice but to raise taxes. Massachusetts, New York, New Hampshire and Vermont must close gaping and “unplanned” revenue shortfalls caused by reckless management or a downturn in the local economy. Last week New York Gov. Mario Cuomo typically blamed Washington for his plight–ignoring several straight years of tax cutting in New York itself.

Governors and state legislators have found ways to increase taxes without taking blame. One technique is to put the question directly to voters by a referendum or initiative-just as California did with the gas tax. This week North Dakotans will I vote on an increase in sales taxes from 5 to 6 percent with the funds earmarked for schools. New York, Utah and California will all have specific new tax initiatives on the ballot next fall. “We’re going to end up with the voters having the line-item veto,” says Democratic consultant Robert Squier, who half-jokingly imagines TV viewers with computer wands registering their likes and dislikes from their sofas.

“Here comes the judge” is another copout for action by legislatures. In a dozen states, courts have or are expected to order between schools in poor urban or rural areas and more well-to-do suburbs. Under one court order, Texas legislators and Gov. William Clements have struggled all year to come up with a scant quarter-cent sales-tax hike. But state politicians in Kentucky, facing a similar court decree, and in Oklahoma, have put through huge tax increases this year. Kentucky boosted everything–taxes on personal and corporate income, sales and property-and raised a whopping $1.1 billion over two years.

“Soak the rich’: One politician stands alone in actively pushing for tax increases. New Jersey Gov. Jim Florio, elected last fall, announced that his state’s public services, including education, were badly in need of overhaul. He has proposed a $1.3 billion package that raises personal-income taxes (the top rate on couples earning above $150,000 would go from 3.5 to 7 percent) and corporate-income taxes, as well as sales taxes (from 6 to 7 percent), and fuel, tobacco and alcohol increases. Political observers are waiting to see how Florio’s “soak the rich” increases play with voters. To raise large sums, Florio has started his income-tax increases with couples earning more than $70,000, many of whom do not consider themselves wealthy.

Around the country, voters are likely to resist general tax increases to fund government across the board. Soured by the apparent failure of many social-welfare programs, angry at corruption and fiascos like the S&L bailout, many voters assume their money would just be wasted or stolen. “To many voters, the biggest line item in the budget is waste, fraud and abuse,” says Democratic Party spokesman Mike McCurry. But polls show that voters are willing to pay higher taxes for specific services, like building schools or cleaning rivers. Voters are also more likely to favor local taxes than federal taxes. “Washington’s a long way away,” says Steven Hofman, a public-policy expert. “The closer government is to the taxpayer, the easier it is for taxpayers to see what they get for their money.” Congress may indeed avoid a tax increase this year. But most voters won’t.

RICH THOMAS

Voters accept new taxes to address specific needs. Recent examples:

Education: To fund poor and rich school districts equally, Oklahoma and Kentucky raised sales and income taxes this year. Texas and New Jersey propose similar action.

Infrastructure: North Carolina, New Hampshire, Washington and Oklahoma hiked gas taxes to pay for new roads, bridges and repairs.

Fuel Tanks: To fix leaky underground gas tanks, Idaho, Utah, South Carolina, Maine, Nevada, Nebraska and Oklahoma upped fuel taxes.

Drug and Alcohol Abuse: In November Californians vote on a proposition that would raise liquor taxes to fund treatment centers.

Environment: Minnesota taxes garbage to fund recycling efforts. California voted to use tobacco taxes to build wildlife preserves.