UNDER CONSTRUCTION – DO NOT SHARE!
Protect our Schools and Health Care!
What’s the Background? California’s General Fund is used to pay for most public services – including education and health care. Income Taxes pay for most of the spending from the General Fund, and about half of income taxes come from “high-income earners”. In 2012, California experienced a crisis in school funding due to a downturn in the economy resulting in reduced revenues from lower income taxes. At that time, California ranked near the bottom nationally in per-pupil school spending – behind almost every other state. To stave off extreme cuts to public education and continue funding critical state services, voters passed a temporary tax increase on wealthy Californians – the top 2%. As a result, California was able to create a “Rainy Day Fund” and improve school spending over the past 14 years – providing free school meals, free transitional kindergarten to all four-year-olds, free before-and-after school care for younger elementary students, and community services in many school districts – giving all of California’s school children the opportunity to thrive.
The tax increase was originally scheduled to expire in 2018; however, California voted to extend the tax increase in 2016. It is now scheduled to expire in 2031. Proposition 3 makes the 2012 tax rates on wealthy Californians permanent so our schools can keep providing the services our children deserve. If it fails, schools could lose up to $15 billion a year – forcing layoffs and cuts to the very programs described above.
What would Proposition 3 do?
- Permanently extend the tax rates established in 2012 for wealthy Californians.
- Apply the tax rates established in 2012 only to income over $371,000 for single filers, over $742,000 for joint filers, and over $505,000 for heads of household – adjusted yearly for inflation.
- Apply standard tax rates for all income below the thresholds listed above.
- Adjust minimum income thresholds annually based on inflation.
- Deposit funds into the Education Protection Account to ensure it is allocated as required.
- Allocate education funds 89% to K-12 schools, 11% to community colleges, and prohibit spending any of it on administration.
- Free up state funding for a Rainy Day Fund to prevent cuts to health care for children and their families; services for seniors, working families, and small businesses; wildfire prevention; and other critical needs.
- Require independent audits annually to ensure funds are spent only for the purposes set forth in the proposition.
- Require local education agencies (i.e., school districts and county offices of education) to submit annual reports detailing the funds they received and how they were spent.
- Generate between $5 billion and $15 billion in revenue annually depending on economic conditions.
| Myths | Facts |
| “If Proposition 3 passes, wealthy Californians will leave the state.“ | This is NOT a new tax. The rates have been in place for 14 years, and California is still home to more high earners than any other state. Furthermore, the tax rate on high-income earners only applies to money earned above the minimum threshold – not to total income – making it a small price to pay to enjoy the benefits of living in California and keep our state financially strong. |
| “There is no accountability for the taxes raised under Proposition 3.“ | Proposition 3 requires that funds be deposited into the Education Protection Account to ensure they are NOT diverted to other purposes, and independent audits are conducted annually to ensure funds are being spent as authorized. |
| “Proposition 3 is a tax increase on Californians who already pay high taxes.“ | There is no additional tax on working families. Tax rates on the top 2% are extended not increased, and minimum income levels are indexed to inflation on an annual basis. Failure to pass Proposition 3 would be a tax cut for the wealthy. |
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OPPOSED BY:
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