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3 Tax Measures Qualify for November Ballot

Three rival tax increase initiatives have qualified for the state ballot in November.

3 Tax Measures Qualify for November Ballot

Rival tax increase initiatives backed by Gov. Jerry Brown and attorney Molly Munger have qualified for the November ballot, along with an initiative that would change the way multistate businesses calculate how much income taxes they owe, Secretary of State Debra Bowen announced Wednesday.

Brown's measure would increase the sales tax by a quarter-cent on the dollar and raise the income tax on annual earnings over $250,000 for seven years. Eighty-nine percent of the revenues from the measure would be devoted to schools from kindergarten through 12th grade and the other 11 percent to community colleges.

The initiative would also guarantee funding for public safety services realigned from state to local governments.

The measure would generate from $6.8 billion to $9 billon for the 2012- 2013 fiscal year, an average of $5.4 billion to $7.6 billion in the following five fiscal years and lesser amounts in the 2018-2019 fiscal year, according to an estimate from the Legislative Analyst's Office and Director of Finance Ana J. Matosantos.

Brown has called the initiative "modest, fair and temporary."

"It won't solve all of the state's problems, but it will help dig us out of a deep hole and protect our schools until the recovery is complete," Brown said May 14 as he presented his revised state budget proposal.

John Kabateck, executive director of the National Federation of Independent Business/California, said the initiative's "huge tax increases will destroy our small businesses and cost us jobs."

"This measure simply gives the politicians in Sacramento more tax money to spend on pet projects, like pensions and the high speed train to nowhere," Kabateck said.

Munger's measure would increase personal income tax rates for annual earnings over $7,316 using a sliding scale from 0.4 percent for the lowest individual earners to 2.2 percent for individual earning more than $2.5 million.

During the first four years, 60 percent of revenues would go to schools from kindergarten through 12th grade, 30 percent to repaying state debt and 10 percent to early childhood programs. Thereafter, 85 percent of revenues would go to schools from kindergarten through 12th grade and 15 percent to early childhood programs.

The measure would generate about $5 billion to $5.5 billion in the 2012- 2013 fiscal year and $10 billion to $11 billon per fiscal year, beginning in the 2013-2014 fiscal year, tending to increase over time, according to an estimate from the Legislative Analyst's Office and Matosantos.

The third initiative would require multistate businesses to calculate their California income tax liability based on the percentage of their sales in California.

Projects that create energy efficiency and clean energy jobs would receive $550 million in each of the first five years the law would be in effect.

The measure would generate $500 million in the 2012-2013 fiscal year and $1 billion in each fiscal year beginning in the 2013-2014 fiscal year, according to an estimate from the Legislative Analyst's Office and Matosantos.

The three initiatives that qualified for the ballot today increase the number of measures on the November ballot to 11. The others are:

  • an $11.1 billion bond measure to upgrade California's water system;
  • a ban on the government deducting union dues from government employee paychecks that would be used for political purposes;
  • a proposal to replace the death penalty with life imprisonment without the possibility of parole;
  • a plan to allow auto insurance rates to be based on a person's history of coverage; and
  • a referendum on the state Senate redistricting plan;
  • a loosening of the three-strikes law;
  • an increase to penalties for human trafficking; and
  • a requirement to label genetically engineered foods.

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