Governor Brown has compromised on a new tax initiative, forging a partnership with the California Federation of Teachers on the “Schools and Local Public Safety Protection Act of 2012.” It is estimated that the new plan will generate $9 billion in additional funding in the next fiscal year, and two billion dollars more than the Governor’s previous initiative. The new plan would raise the statewide sales tax by a quarter-cent rather than a half-cent per every dollar. It retains Brown’s three-tier income-tax hike starting at $250,000 for singles and $500,000 for couples. But the last two brackets increase by greater amounts than Brown originally proposed, with the highest rate rising to 12.3 percent starting at $500,000 of income for single filers.
Approximately 85% of the revenue will come from the highest income tax brackets, and 15% through the reduced sales tax, to support the restoration of programs in education and services that have been seen budget cuts over the last few years.
The Brown/CFT measure must still contend with an initiative filed by attorney Molly Munger to raise income tax rates on all but the poorest taxpayers. For more information contact Kate Klimow, Vice President of Government and Community Affairs.