(The Center Square) – According to reports by the California Budget & Policy Center, Nov. 3 ballot measures could cost Californians billions of dollars.
The Center Square projects that if Propositions 1, 2, 3, 37 and 40 passed, the Golden State’s taxpayers could pay roughly $155 billion over the next several years, although higher-income earners would pay more of that amount if the state’s billionaire tax, Prop. 40, passes. Another measure, Prop. 3, would make permanent current income tax rates that have higher income-earners pay more in state income tax, saddling California’s richest residents with more of that cost than middle- or lower-income Californians. The Center Square bases its $155 billion projection on its previous reporting and numbers from the California Budget & Policy Center.
Despite the hefty price tags attached to those propositions, Chris Hoehne, the center’s executive director, said Californians won’t necessarily see a huge bump in their tax bill every year.
“The vast majority of taxpayers in California won’t see any real effect on their tax bill,” Hoehne told The Center Square on Wednesday. “So the actual tax measures don’t really impact the overwhelming majority of Californians.”
One measure, Proposition 1, asks voters to approve or project an $11.25 billion housing bond that would pay for affordable housing projects, including housing for veterans and shoring up funding for homelessness programs. The California Budget & Policy Center said in its report on this proposition that the state needs 2.5 million new homes, including 1 million homes for lower-income families.
The center’s report on Proposition 2, which increases the amount of general fund money allocated to the state’s Rainy Day Fund, highlights the debt pay-down timeline. That timeline would be extended by 10 years, from 2029-30 to 2039-40. Proposition 2, notably, would increase the amount of money required to be deposited into the Rainy Day Fund every year from 10% of general fund revenue to 20%.
According to the center’s report on Proposition 3, the top 1% of income earners in California would get a tax cut unless the proposition passes. That measure makes current tax rates on high income earners permanent, extending funding for taxpayer-funded services like K-12 and community college education.
Those propositions were supported by Democratic politicians in California this year as good-governance measures that were meant to help pay for services that help make quality of life higher for Californians throughout the state, one Democratic lawmaker told The Center Square.
“The State of California experiences these cycles of boom and bust,” Assemblymember Nick Schultz, D-Burbank, told The Center Square about Prop. 2. “There are other good governance measures we can do to not spend everything we take in that year, and I think Prop. 2 is one small, but significant, part of that.”
Drastic cuts that many lawmakers feared they would have to make were averted in large part because of the Rainy Day Fund, Schultz said.
“Given the volatility of our revenue streams and this increasing threat from D.C. to choke off more funding to California, I think this is definitely a measure worthy of consideration by the voters,” Schultz said.
The center published two other reports – one on a homebuyer assistance proposition and one on the billionaire tax. The homebuyer assistance proposition, Prop. 37, would use $25 billion of revenue bonds to provide up to 17% of the purchase price of a down payment on a house for first-time home buyers, while the billionaire tax, Prop. 40, would impose a 5% wealth tax on California’s billionaire class to shore up funding for education, health care and other taxpayer-funded programs.
Some groups, like the Howard Jarvis Taxpayers Association, oppose many of these propositions, including the billionaire tax measure – in large part because of the high-profile billionaires who already relocated to other states, presumably because of the proposed billionaire tax.
“The top 1% of tax filers pay almost 50% of all the personal income tax in the state,” Susan Shelley, vice president of communications for the Howard Jarvis Taxpayers Association, told The Center Square on Wednesday. “So if you start driving people out of the state, and keeping new businesses from opening here because of the tax structure, that hurts everybody.”
