Prop 30, The Schools and Local Public Safety Protection Act

 California Federation of Teachers, AFT/AFL-CIO

Talking Points / Prop 30, The Schools and Local Public Safety Protection Act

Core messages

• Everyone needs to pay their fair share to fund California’s future, including the wealthy

• This measure will raise $9 billion in the first year and $6 billion/year for public education and local public safety

• It is a progressive tax measure, with 90% of the revenues coming from people who make at least $250,000/year

• It will prevent trigger cuts from further devastating our schools, higher education, and vital services

Who it taxes:  Personal income in excess of $250,000/year

Prop 30 will impose a 1 to 3% additional tax on personal income in excess of $250,000, $300,000, and $500,000 per year, and joint filers at $500,000, $600,000, and one million dollars. The income tax portion of Prop 30 will only tax people who make more than a quarter million dollars per year.  The sales tax portion of the measure is a modest ¼ cent increase, or one cent on a $4 hamburger.  9 of 10 dollars generated will be from the wealthy.

Why we need Prop 30:  to restore education, public services

$20 billion in public education funding reductions over the past three years have resulted in

·       layoffs and furloughs of thousands of school employees, and social service and public safety workers

·       the school year has been shortened in many districts, and class sizes have increased by as much as 35%

·       college and university students have lost classes, and student costs have skyrocketed along with time needed to graduate; student debt now exceeds all credit card debt.

·       Cuts to public safety, health and human services, taken from the sick, the elderly, disabled and the hungry.

·       Without passage of this measure, “trigger cuts” would eliminate additional billions of dollars in programs and jobs.

Prop 30 will rehire laid off teachers to reduce K-12 class sizes and restore lost college courses, and restore cuts to local public safety agencies. 

A progressive tax proposal

With Prop 30 no one but the wealthy would pay more in income taxes.  The top one percent of income earners has doubled its share of total state income over the past twenty years, while income for the rest of us has stagnated or gone backwards.  The top one percent currently takes in nearly one quarter of total state income; twenty years ago it was just one eighth.  At the same time, the top tax brackets (state and federal) today are lower than they used to be.  Between 1991 and 1996 the highest tax bracket in California was 11% of income; today it is 10.3%.  When Congress extended the Bush federal tax cuts for the rich in 2010, the top 1% in California received a windfall totaling nine to fourteen billion dollars per year.  This is nearly equal to the entire state budget deficit.

California is the richest state in the richest country on earth.  California is not “broke.”  Rather, the problems are that the tax system is broken, and the state’s money is increasingly in the wrong pockets.  Most of us are already paying our fair share of taxes.  It’s time everyone did, including the wealthy. As former Google software engineer Frank Jernigan said, “For me, an extra 2% or 3% in taxes is not going to make a bit of difference in the way that I live.  But by bringing billions of dollars in new revenues to California for public schools and safety, Prop 30 will make a tremendous difference in the lives of many.” This measure will increase the progressivity of the state income tax code by extending the 10.3% bracket down to $250,000, and adding brackets at $300,000 (11.3%), $500,000 (12.3%), and joint filers at $1 million (13.3%).

Opinion research shows Prop 30 is the most likely tax measure to pass

Numerous public opinion polls show that the electorate understands the growing economic inequality in California and the country, and believes that 99% of us are already paying our fair share of taxes, while the 1% richest does not, but should.  Polling numbers for Prop 30 are strong.  Emphasizing the strongly progressive nature of the income tax portion Act, while acknowledging the smaller regressive sales tax component, helps people to positively assess the impact of the Act.  Prop 30 is the best policy to restore public services and reduce economic inequality, and the idea that the public likes the most.