Teachers Union and Hospital Association Unite Behind Measure to Extend Personal Income Tax Increase

The California Teachers Association and the California Hospital Association joined forces December 3 and filed an initiative that would extend the higher personal income tax rates approved by voters in 2012 with passage of Proposition 30.

Initiative 15-0115, which proponents call “The California Children’s Education and Health Care Protection Act of 2016,” would allow Proposition 30’s sales tax increase to expire, but would extend the increase in personal income tax rates through tax year 2030.

The personal income tax rates imposed by Proposition 30 would not be changed by the new initiative. Under existing law, the Franchise Tax Board adjusts income brackets for each taxable year to account for inflation.

Proposition 30, placed on the 2012 ballot by Governor Jerry Brown, included both an income tax and sales tax increase. The sales tax increase is scheduled to sunset at the end of 2016, while the income tax increase is scheduled to expire before the 2019 taxable year.

The California Teachers Association and the California Hospital Association each had filed initiatives that could have presented voters with the decision of picking between taxes supporting education or health care. Rather than face the prospect of competing with each other on the ballot, they joined forces to file the new joint measure. They are expected to begin collecting signatures as soon as the attorney general prepares the official title and summary for the initiative, and observers believe the groups have enough resources to easily qualify the measure for the November 2016 ballot.

This new initiative would divert a portion of the revenue now earmarked for school funding to health care programs. Specifically, the initiative would require the Department of Finance to determine how much of the revenue generated for education exceeds the minimum school funding guarantees under Proposition 98 and school workload budgets. The department would take 45 percent of the remaining funds (up to $2 billion) and earmark the money for the California Department of Health Care Services for the stated purpose of ensuring that students are healthy, and to improve students’ school attendance.

December 4, 2015

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