Delivering on his pledge to ask the people of California to vote on the
best path forward, Governor Edmund G. Brown Jr. today hailed the
passage of Proposition 30 as a clear and resounding victory for
children, schools and the California dream.
“Last night, Californians made the courageous decision to protect our
schools and colleges and strengthen the California dream,” said Governor
Brown. “We joined together as Californians first in a resounding
victory for education and fiscal integrity. The people of California
have put their trust in a bold path forward and I intend to do
everything in my power to honor that trust.”
Governor Brown was elected on a promise to confront the state’s
perennial budget crisis with honesty and resolve. When Governor Brown
returned to Sacramento after almost three decades, California faced a
$26.6 billion budget deficit — the result of years of budget gimmicks, a
failure to match spending with tax revenues and a massive economic
downturn.
Since Governor Brown took office he has cut billions in spending from
the budget. State spending as a share of the economy has hit the lowest
level since Ronald Reagan was governor—and the state’s credit outlook
has shifted first from negative to stable, and then from stable to
positive.
However, without additional revenue a deficit remained. The Governor
proposed a budget that combined deep cuts with a temporary extension of
then-existing taxes. But Republicans blocked an election, refusing to
put the measure on the ballot and let the people decide.
Facing the necessity of crippling cuts to education without new revenue,
Governor Brown introduced Proposition 30 (The Schools and Local Public
Safety Protection Act of 2012), which makes California’s tax system more
fair, guarantees funding for public safety realignment and invests in
education.
Proposition 30 raises the income tax on those at the highest end of the
income scale — those who can most afford it – while families making less
than $500,000 a year will pay no additional income taxes. It also
temporarily increases sales tax by ¼ cent, keeping the overall sales tax
rate lower than it was in early 2011. The revenue generated through
Proposition 30 prevents $6 billion in cuts to our schools this year and
will provide billions for our schools in the future.
The new taxes in this measure are temporary. The sales tax increase will
expire in four years, and the income tax increase for the wealthiest
taxpayers will end in seven years.
The new revenue is guaranteed in the California Constitution to go
directly to local school districts and community colleges. Proposition
30 bars use of funds for administrative costs, but provides local school
governing boards discretion to decide, in open meetings and subject to
annual audit, how funds are to be spent.
Proposition 30 also provides constitutional protection of funding for
public safety services realigned from state to local governments.
To ensure all of these funds go where the voters intend, they are put in
special accounts that the Legislature cannot touch. Proposition 30
funding is also subject to an independent audit every year to ensure it
is being spent only for schools and public safety. The audit will be
open to the public so that voters and parents know that the funds are
being spent properly.
The sales tax increase is effective January 1, 2013 and the income tax increase is effective starting with the 2012 tax year.
