What Would Proposition 30 Mean for California?

Proposition 30 would increase personal income tax rates on very-high-income Californians for seven years and would raise the state's sales tax rate by one-quarter cent for four years. Revenues from Proposition 30 would boost funding for public schools and prevent deeper cuts to critical state programs.  
 
This Budget Brief provides an overview of the measure and the policy issues it raises. Specifically, the brief shows that:

• Proposition 30 revenues would help stabilize the state budget. Projected revenues from Proposition 30 are part of the 2012-13 state spending plan and comprise one-third of the dollars helping to fill the budget gap. The measure would raise an average of approximately $6 billion annually between 2012-13 and 2016-17, according to Legislative Analyst's Office estimates, helping to eliminate budget gaps over the next few years. Proposition 30 thus would provide a foundation on which to rebuild after years of deep spending cuts to virtually all areas of the budget.
• Proposition 30 would increase funding for K-12 schools and community colleges, and prevent deeper cuts to other public systems and programs. Proposition 30 would boost General Fund revenues, thereby increasing the Proposition 98 minimum funding guarantee for schools and community colleges. Because Proposition 30 revenues would also count toward the guarantee, General Fund dollars would be freed up to help close the budget gap. If voters reject Proposition 30, funding for K-12 public schools, colleges and universities, and other public systems and programs would be automatically cut to bring the budget into balance.
• Revenues from Proposition 30 would come predominantly from the wealthiest 1 percent of Californians. The top 1 percent, who have annual incomes over a half-million dollars, would contribute more than three-quarters (78.8 percent) of the new revenues, while the top 5 percent, who have annual incomes over $200,000, would contribute more than 80 percent of these revenues.

The California Budget Project engages in independent fiscal and policy analysis and public education with the goal of improving public policies affecting the economic and social well-being of low- and middle-income Californians.

Read the analysis (PDF).