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2012 STATEWIDE: No on Proposition 38: Tax to Fund Education & Early Childhood Programs (SCC)
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Election - November 6, 2012
State of California
State of California
Proposition 38:
Tax to Fund Education and Early Childhood Programs
SVTA recommends a NO vote against Prop. 38.
- Increases personal income tax rates on annual earnings over $7,316 using sliding scale from .4% for lowest individual earners to 2.2% for individuals earning over $2.5 million, for twelve years.
- During first four years, allocates 60% of revenues to K+12 schools, 30% to repaying state debt, and 10% to early childhood programs. Thereafter, allocates 85% of revenues to K+12 schools, 15% to early childhood programs.
- Provides K+12 funds on school-specific, per-pupil basis, subject to local control, audits, and public input.
- Prohibits state from directing new funds.
Fiscal Impact from the Legislative Analyst's Office
- Increase in state personal income tax revenues from 2013 through 2024. The increase would be roughly $10 billion in 2013+14, tending to increase over time. The 2012+13 increase would be about half this amount.
- In each of the initial years, about $6 billion would be used for schools, $1 billion for child care and preschool, and $3 billion for state savings on debt payments. The 2013+14 amounts likely would be higher due to the additional distribution of funds raised in 2012+13.
- From 2017+18 through 2024+25, the shares spent on schools, child care, and preschool would be higher and the share spent on debt payments lower.
- A YES vote on this measure means:
- State personal income tax rates would increase for 12 years. The additional revenues would be used for schools, child care, preschool, and state debt payments.
- A NO vote on this measure means:
- State personal income tax rates would remain at their current levels. No additional funding would be available for schools, child care, preschool, and state debt payments.
- Full Text
- Impartial Analysis from the Legislative Analyst's Office
| Arguments for Proposition 38 |
Arguments Against Proposition 38 |
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Education is our future because children are our future. Without quality schools, our state will lack the skilled workforce needed to grow our economy and create jobs. Instead of investing in our schools, political leaders from both parties have been cutting. Since 2008, they’ve cut school budgets by $20 billion. Over 40,000 educators have been laid off, and California now has the largest class sizes in the nation. RESTORE AND EXPAND SCHOOL FUNDING. Proposition 38 makes schools a priority again. It provides guaranteed funding to restore a well-rounded education and improve educational outcomes. It guarantees billions of dollars to local schools based on enrollment, averaging $10 billion annually over twelve years. School sites can use the money to reduce class sizes or restore classes in art, music, math, science, vocational and technical education and college preparation--based on different needs at different schools. Learn how much new funding Proposition 38 sends directly to schools in your community at: www.moneyforlocalschools.org PREVENT MORE CUTS. Proposition 38 helps prevent more budget cuts by setting aside $3 billion annually through 2016–17 to reduce the state deficit by repaying state education bond debt. PREPARE CHILDREN TO SUCCEED. 38 provides over $1.1 billion annually to restore budget cuts to early childhood education, improve quality, and expand access to preschool. A FAIR-SHARE WAY TO INVEST IN OUR SCHOOLS. As Californians, we should all contribute something to improve our schools because we will all share in the benefits better schools will bring to our state’s economy and quality of life. Proposition 38 provides $10 billion annually to restore school funding by raising state tax rates on income after all deductions, using a sliding scale based on ability to pay. The wealthiest taxpayers pay the most, with rates rising 2.2% for individuals on incomes over $2.5 million. At the low end, taxpayers with incomes under $25,000 would pay an annual average of $7.00. Learn how Proposition 38 affects taxpayers like you at: www.moneyforlocalschools.org/ FIVE GUARANTEES TO PARENTS AND TAXPAYERS:
MAKE SCHOOLS A PRIORITY AGAIN. YES ON 38.
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No on Prop. 38: $120 Billion Income Tax Hike on Most Californians If you earn $17,346 or more per year in taxable income, Prop. 38 raises your California personal income tax rate by as much as 21%, on top of what you pay the Federal government. The Prop. 38 tax increase continues until 2024. If you have a child entering first grade, you’ll be paying higher income taxes until that child graduates from high school. Even as the economy improves and more people get back to work, the tax increases continue. Even without necessary reforms to our education system, like the ability to fire bad teachers, the tax increases still continue. Prop. 38 locks us into higher income tax rates for the next twelve years--no matter what! The politicians and bureaucrats get billions of dollars in new taxes, with virtually no accountability on how the money is spent and how much actually gets into the classroom. Targets Small Business and Kills Jobs Approximately 3.8 million California small businesses pay individual taxes on their earnings, rather than corporate taxes. Consequently, small businesses will be devastated by these higher taxes--even businesses making as little as $30,000 or $40,000 a year. Instead of creating jobs and improving the economy, Prop. 38 will force family businesses to cut jobs, move out of state, or even close. If they can stay in business, they’ll raise prices to pay the higher taxes, which will ultimately be passed on to consumers. No Requirements to Improve School Performance Under 38, there are no requirements to improve school performance or get rid of bad teachers. Too much money will continue to be spent on administration, consultants, pensions, benefits and overhead and too little will be spent in the classroom. Currently, 24% of California students don’t graduate from high school. Prop. 38 pours more money into a system that is failing our kids without requiring improvements in outcomes for students. No Changes, Even for Fraud or Waste, for Twelve Years Prop. 38 contains a special provision hidden in its twenty-seven pages of fine print that prohibits any changes in the measure through 2024 (without another vote of the people), even in the case of waste, fraud or abuse. $120 Billion in New Taxes, but Nothing to Reduce Our Deficit Prop. 38 allows the politicians in Sacramento to keep spending. There is nothing in Prop. 38 that requires any of the funds to be used specifically for deficit reduction and nothing that stops the politicians from getting us back into the same mess we’re in now, even with $120 billion in new taxes. No on Prop. 38:
No on Prop. 38--Another flawed, costly and misleading initiative.
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| Rebuttal to Argument for Prop. 38 |
Rebuttal to Argument against Prop. 38 |
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We all want better schools. But throwing $120 BILLION NEW TAX DOLLARS into a new unaccountable state bureaucracy will not bring back quality education for our children. Instead of reforming the system, cleaning up waste and abuses, Prop. 38 raises taxes and throws more money into an unaccountable bureaucracy:
Join California educators, doctors, law enforcement officials, taxpayer organizations and small business leaders in voting No on 38. www.StoptheMiddleClassTaxHike.com
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Our schools are in trouble. $20 billion in budget cuts. 47th out of 50 states in per pupil spending. 40,000 educators laid off. Instead of prioritizing education, politicians are cutting back. Prop. 38 offers a solution. Its opponents offer no solutions, only misleading attacks.
Proposition 38 guarantees schools new funding averaging $10 billion annually for twelve years to restore cuts and improve educational outcomes. We rely on public schools to educate our children and provide employers with skilled, productive employees. Failing to invest in schools hurts our children and our economy. Read 38 for yourself at prop38forlocalschools.org. Make schools a priority. Yes on 38.
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- Contact AGAINST Proposition 38:
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Jason Kinney; Stop the Middle-Class Income Tax Hike--No on Prop. 38
980 9th Street, Suite 2000
Sacramento, CA 95814
(916) 806-2719
Paid for by the Silicon Valley Taxpayers Association PAC.