Rival Tax Increase 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 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.

Officials from the Walnut Valley Unified School District, which serves Diamond Bar, and Mt. San Antonio College have said they keeping an eye on the measures, but are crafting budget plans with and without the tax initiatives in mind.

Assistant Superintendent Jack LeBrun said in May that the district could see a $370 per pupil reduction from the state, depending on what happens with Brown’s tax initiative.

Even if the initiative passes, the district is deficit spending at a rate of more than $4 million a year through 2013-14, he said, adding that Walnut Valley Unified has work to do either way. 

“We have to address that burn rate in order to stay solvent,” he 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 from $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 measure would require multistate businesses to calculate their California income tax liability based on the percentage of their sales in California.

For each of the first five years that the law would be in effect, $550 million would be dedicated to funding projects that create energy efficiency and clean energy jobs.

The measure would generate $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.