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Compromise On Dueling Tax Measures - Mar. 14, 2012



As you likely know, there has been a significant debate, particularly in the education community, about whether Governor Jerry Brown's temporary sales and income tax increase or the California Federation of Teachers-led coalition's "Millionaires Tax" was better public policy and/or politics. As recent as 24 hours ago, it appeared that both were destined to be on the ballot, possibly dooming each other.

The League's CCCT and CEOCCC boards took positions of "support" on the governor's measure in January and were going to consider CFT's measure in April. While we appreciated the governor's goal to avoid opposition, we also knew that CFT's measure had the passion of many of our most active faculty and student leaders.

Late last night, we got word that a compromise deal was near, and it looks like one has been reached.

The details are still emerging, but it sounds like the measure will last 4 years for sales taxes and 7 years for personal income taxes, a compromise between the governor's 5 years and CFT's permanent increase. The sales tax increase would be 0.25%, lower than the governor's 0.5%. The personal income tax increases, while still only on high-income earners, would be a compromise. Marginal tax rate increases of 1% would start for individuals making $250,000 and phase-in to a high of 3% for those making more than $1 million. By dropping the 5% rate for $2 million+ earners, backers of the compromise hope the state Chamber of Commerce will continue to be neutral on the plan.

We assume that there are also some agreements on the spending plan of the $4-6 billion the initiative would bring in, although details are not yet available. The governor's plan had been labeled a "shell game" by some education advocates, while social services advocates and counties were concerned that the initiative was poorly drafted and could lead to artificial caps on some programs. The measure would, like the governor's, be a constitutional amendment to protect public safety realignment funding for counties.

The compromise does not affect Molly Munger's initiative, which would raise $10 billion for preK-12 education. The measure trails badly in released polls.

Let's hope that the compromise comes to fruition so we can begin to explain to our communities the balanced approach of very deep cuts and temporary taxes that will reign in California's budget deficit and begin to restore essential public services, such as classes for our students in community college.


Scott Lay
President and Chief Executive Officer, The League
Orange Coast College '94

Community College League of California
2017 O Street, Sacramento, California 95811
916.444.8641 . www.ccleague.org

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Last Updated: 3/22/12