Issue:  Vol. 48 / No. 3 / 18 January 2018

Editorial: CA tax measures –
Yes on 30; No on 38


Governor Jerry Brown (Photo: Lydia Gonzales)
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Both Propositions 30 and 38 would increase state taxes. Prop 30 was crafted by Governor Jerry Brown and is an initiative constitutional amendment, also known as the Schools and Local Public Safety Protection Act. It came about after his failure to negotiate a compromise with the state Legislature to close the state's budget gap. Prop 38, titled the same as Prop 30, was crafted by wealthy attorney Molly Munger and essentially completely financed by her. They are competing measures, and, if they both win, the one with the most votes takes effect. We believe Prop 30 is better reasoned and less harmful to the middle class and recommend a YES vote. We recommend a NO vote on Prop 38.

Anyone paying attention knows the dire straits the state of California is in. Unemployment is among the highest in the nation. Tax revenues have plummeted and public services, from education to public safety, have sustained draconian cuts. Failure to adopt a meaningful tax increase measure will have unthinkable consequences.

Prop 30 raises the tax rate on those taxpayers most able to pay. It raises the personal income tax rate on individuals making more than $250,000 a year but less than $300,000 by 1 percent. Single taxpayers earning between $300,000 and $500,000 annually would see their income tax rate increased by 2 percent, and earners over $500,000 would have their taxes increased by 3 percent. The earnings thresholds are doubled for married taxpayers. For single taxpayers earning less than $250,000 ($500,000 if married), there would be no tax rate increase. These new tax rates would be temporary and in place for seven years. Additionally, Prop 30 raises the state sales tax by a quarter cent for the next four years. It aims to raise about $6 billion annually.

Prop 38 is a much broader measure, raising taxes on essentially all taxpayers beginning with singles earning $7,316 ($14,632 for married taxpayers). The rate of increase starts at 0.4 percent and goes up to 2.2 percent for singles earning more than $2.5 million or joint filers over $5 million. It aims to raise $10 billion annually over 10 years.

We support Prop 30 for several reasons, not the least of which is that it is the product of the political process (although attempts to reach a legislative compromise failed) in which the governor, the Democratic majorities in the Legislature, and affected stakeholders were all part of the negotiations and compromise that resulted in the proposition before the voters. Prop 38 did not result from a collaborative process but was the plan put forward by one wealthy individual.

New revenues from Prop 30 would be used to help balance the state budget and to fund schools. The current budget adopted by the legislature is linked to Prop 30. If it goes down to defeat, it will cause "trigger cuts" to go into effect. Schools and community colleges would lose some $5.4 billion; the University of California and California State Universities would lose another one half billion. Public safety (city police department grants and firefighter services) would lose tens of millions of dollars. Flood control programs and local water safety patrol grants would lose another $10 million. These figures are provided by the Legislative Analyst's office.

Prop 30 has the broad support of education and public safety groups as well as health care and business and community organizations. Labor strongly supports Prop 30.

Prop 30 is a reasoned approach to a dire problem. Failure to act will have catastrophic consequences to education and public safety in California. It asks those in the higher income brackets who can afford to pay more to increase their support for the common good. Vote YES on Prop 30 and NO on Prop 38.

To view the complete list of B.A.R. endorsements, click here:

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