California Statewide - November 2012

Proposition 38
 Tax to Fund Education and
Early Childhood Programs.


SVTA recommends a NO vote against Prop. 38.

Text of the measure:

Should California's personal income tax rates be increased during 2013-24 to provide funds for public schools, early childhood education programs, and state debt payments?

Summary Prepared by the State Attorney General:

  • Increases personal income tax rates on annual earnings over $7,316 using sliding scale from .4% for lowest individual earners to 2.2% for individuals earning over $2.5 million, for twelve years.
  • During first four years, allocates 60% of revenues to K+12 schools, 30% to repaying state debt, and 10% to early childhood programs. Thereafter, allocates 85% of revenues to K+12 schools, 15% to early childhood programs.
  • Provides K+12 funds on school-specific, per-pupil basis, subject to local control, audits, and public input.
  • Prohibits state from directing new funds.

Fiscal Impact from the Legislative Analyst's Office:

  • Increase in state personal income tax revenues from 2013 through 2024. The increase would be roughly $10 billion in 2013+14, tending to increase over time. The 2012+13 increase would be about half this amount.
  • In each of the initial years, about $6 billion would be used for schools, $1 billion for child care and preschool, and $3 billion for state savings on debt payments. The 2013+14 amounts likely would be higher due to the additional distribution of funds raised in 2012+13.
  • From 2017+18 through 2024+25, the shares spent on schools, child care, and preschool would be higher and the share spent on debt payments lower.

Meaning of Voting Yes/No:

A YES vote on this measure means:
State personal income tax rates would increase for 12 years. The additional revenues would be used for schools, child care, preschool, and state debt payments.

A NO vote on this measure means:
State personal income tax rates would remain at their current levels. No additional funding would be available for schools, child care, preschool, and state debt payments.

Official Sources of Information:

Arguments Submitted to the Secretary of State:

Summary of Arguments FOR Proposition 38:
38 makes schools a priority again. It guarantees new funding per pupil direct to every local public school site to restore budget cuts and improve educational results. 38 prohibits Sacramento politicians from touching the money. Spending decisions are made locally with community input and strong accountability requirements, including independent audits.

Summary of Arguments AGAINST Proposition 38:
No on 38: If you earn $17,346 per year in taxable income, your taxes increase. Total of $120 BILLION in higher taxes. No requirements to improve student performance. Can't be changed for 12 years even for fraud. Damages small business. Kills jobs. Educators, taxpayers and businesses say No on 38.
Contact FOR Proposition 38:
Yes on Prop. 38
(323) 426-6263

Contact AGAINST Proposition 38:
Jason Kinney; Stop the Middle-Class Income Tax Hike--No on Prop. 38
980 9th Street, Suite 2000
Sacramento, CA 95814
(916) 806-2719



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