03/20/2012

California Tax Initiative Closer to November Ballot

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The California Federation of Teachers and California Gov. Jerry Brown have reached a compromise on dueling tax initiatives they have been campaigning to place on the November ballot.

The governor announced the agreement on March 14, after the conclusion of negotiations with the CFT and Restoring California, a coalition of educators and community leaders who have been pushing for the Millionaires Tax ballot initiative.

The CFT initiative, called the "Millionaires Tax to Restore Funding for Education and Essential Services Act of 2012," would have increased tax rates on personal incomes in excess of $1 million to provide an estimated $6 billion annually to finance education and public services.

The governor had been pitching a ballot proposal to increase the sales tax by one-half cent per dollar and the income tax rate on those with personal incomes over $250,000, to achieve a comparable revenue increase.

The compromise, hammered out between the CFT coalition, the governor, and leaders of the state Assembly and Senate, reflects a smaller sales tax increase than the governor wanted—one-quarter cent per dollar—and a three-tier income tax hike for joint filers with incomes over $500,000, $600,000 and $1 million. It would increase revenue by an estimated $9 billion in the first year, and $6 billion annually for the next few years, with the sales tax increase ending in 2016 and the income tax hike ending in 2018.

Since the CFT and Restoring California filed in December to put a tax initiative on the 2012 ballot, labor, education and community groups have had little trouble drumming up support for the measure. A CFT-sponsored poll last year showed what national polls have been showing since the start of the Occupy Wall Street movement: Californians overwhelmingly support taxing the rich over seeing further cuts to schools and other vital services.

A third tax initiative on the ballot is sponsored by a civil rights attorney Molly Munger, but is not popular among state residents, polls show. It proposes raising income taxes across the board, down to $7,300 per year.

"Our values and principles are clearly reflected in this new initiative," says CFT president Joshua Pechthalt, who is a co-chair of the Millionaires Tax campaign. It "reduces the burden on working families and ensures a greater contribution from the 1 percent."

Now, the agreement's supporters will be joining forces to collect the necessary signatures to ensure the initiative qualifies for the ballot in November. You can track its progress on the California Federation of Teachers website. [Fred Glass, CFT press release, news reports]

March 20, 2012