Compromise Tax Initiative Explained
The Governor, legislative leaders and the California Federation of Teachers have reached a compromise on a new funding initiative. The new measure uses the structure of the Governor’s proposal to provide funding widthin the general fund, close the budget deficit, pay down the state’s wall of debt and restore funding to public schools and colleges. Using the structure of the Governor’s initiative also ensures that state funds can be used to restore cuts to essential social services and pays for the services shifted to local counties.
The compromise measure increases taxes on the wealthy and reduces the temporary sales tax hike to just a quarter of penny. Under the new proposal, income taxes on households earning $500,000 would increase 1%, households earning $600,000 would increase 2%, and households earning more than $1 million would increase 3%. The income tax hikes would last for seven years. The measure raises about $9 billion a year.
The new measure is quickly making its way through the process and may be cleared for signature gathering just in time for discussions at our State Council of Education
meeting this week. The compromise
stands to bring more people together in supporting a responsible tax plan to move California forward. At our meeting in January, we had an open, honest and robust debate of the various tax plans. I plan to follow the same process at this meeting.