Democratic legislators are seeking to amend a budget trailer bill (SB 1039) included in a fiscal year 2012-2013 spending agreement with Gov. Jerry Brown (D) that likely would give a compromise tax hike initiative higher placement on the November ballot, the Sacramento Bee's "Capitol Alert" reports (Siders, "Capitol Alert," Sacramento Bee, 6/25).
Details of Spending Deal
Brown and Democrats recently agreed on a budget deal that would:
- Eliminate Healthy Families -- California's Children's Health Insurance Program -- and move the 880,000 children enrolled in the program to Medi-Cal, California's Medicaid program;
- Reduce state child care assistance by 8.7%, which would reduce the number of slots available to low-income families by 10,600;
- Reduce In-Home Supportive Services workers' hours by 3.6%;
- Phase in a two-year time limit for new beneficiaries to find work under CalWORKs, the state's welfare-to-work program; and
- Require higher graduation rates for colleges and universities to qualify for state college aid and reduce financial aid to college students.
Details of Compromise Tax Hike Plan
The budget deal relies on voters approving a compromise tax hike initiative, developed by Brown and supporters of the "Millionaires Tax." If the ballot measure is not approved, deeper budget cuts could be triggered (California Healthline, 6/22).
The compromise tax hike plan would:
- Increase the personal income tax by one percentage point for individuals who earn $250,000 annually or couples who earn $500,000 annually and by two percentage points for individuals who earn $300,000 annually or couples who earn $600,000 annually;
- Extend the income tax increases on wealthy residents from five to seven years; and
- Increase the sales tax by a quarter of a cent.
The sales tax hike would expire in four years.
The tax would raise an estimated $9 billion over the next fiscal year (California Healthline, 6/21).
Details of Amendment
The amendment proposed by Senate Democrats would move bond measures and constitutional amendments to the top of voting ballots "because of the profound and lasting impact these measures can have on our state," according to the legislation ("Capitol Alert," Sacramento Bee, 6/25).
In 2010, California's statewide ballot listed constitutional amendments in the order they qualified.
If passed, the amendment likely would ensure that the compromise tax hike plan would receive prominent placement on the ballot because it is a constitutional amendment.
The compromise tax hike plan likely would be listed above a rival tax increase proposal by attorney Molly Munger, which is not a constitutional amendment and was among the last proposals to qualify for the ballot (Yamamura, Sacramento Bee, 6/26).
Munger's tax hike proposal, called "Our Children, Our Future," aims to raise income tax for all residents, with highest earners seeing the largest hike. Most of the revenue would support education programs (California Healthline, 6/21).
Nathan Ballard -- spokesperson for Munger's tax increase plan -- said the amendment is "like changing the rules of the game in the seventh inning" (Sacramento Bee, 6/26).