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Initiative Update:
Governor Submits Signatures for Tax Increase Initiative

Governor Jerry Brown submitted a batch of signatures for his tax increase initiative to Sacramento election officials May 10, and his campaign announced that it will submit 1.5 million signatures.

If elections officials deem that at least 807,615 of the signatures are valid, the governor's measure will appear on the November ballot. The initiative calls for a sales tax increase of 0.25 percentage points, and an income tax increase that would hit those with taxable income over $250,000. The sales tax increase would stay in effect from January 1, 2013 through January 1, 2017, and the income tax increase would remain in place for seven years.

Governor Brown said voters should support his tax increases because the state's finances are "screwed up," and the taxes are necessary to get California on "solid fiscal footing."

Two other tax measures also are in the signature-checking phase: an income tax increase sponsored by civil rights lawyer Molly Munger, and a mandatory singles sales factor measure sponsored by hedge fund investor Tom Steyer (see below). (Source: Associated Press, May 10.)

In other initiative news:

California Forward Submits Signatures. Despite pressure from more than 50 labor unions to not submit signatures on an initiative that would make it more difficult to increase spending or reduce taxes, California Forward submitted more than 1.2 million signatures May 7. The group believes it has enough signatures to qualify its initiative for the November ballot.

Among other things, the initiative would prohibit legislation that calls for a tax incentive, tax reduction or fee reduction if the legislation would result in revenue loss of $25 million or more (as estimated by state officials), unless the legislation includes provisions estimated to raise enough revenue to offset the projected cost.

A spokesman for California Forward said the group is negotiating with legislative leaders to enact the changes through the legislative process, but signatures were submitted to ensure that the measure would qualify for the November ballot. If a deal is reached in the Legislature, the group will not campaign for the measure, the spokesman indicated. The measure still would appear on the ballot, however. (Source: The Sacramento Bee, May 7.)

Signatures Submitted for Mandatory Single Sales Factor Initiative. Proponents of an initiative that would require corporations to use an apportionment formula based solely on California sales filed signatures with elections officials May 4. The change to the apportionment formula is projected to raise taxes on some California employers by about $1 billion, half of which proponents have earmarked for energy conservation and green building projects. Proponents include hedge fund investor Tom Steyer, state Senator Kevin de León and former U.S. Secretary of State George Schultz. The proponents believe they have enough valid signatures to qualify their measure for the November ballot.

Meanwhile, Assembly Speaker John Pérez is pursuing a mandatory single sales factor bill in the Legislature (AB 1500), but he has earmarked the estimated revenue for different purposes. The speaker wants to use revenue to create a new college scholarship program. (Source: The Sacramento Bee, May 5.)

May 11, 2012
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