California will vote on Prop. 30 this November, a measure that could change the California Constitution and raise taxes in order to set up an “Education Protection Account” which school districts can use for general funding.
Prop. 30 introduces several new tax measures including a increase in state sales tax from 7.25 percent to 7.5 percent. In addition, this law will increase income tax for earners over $250,000 a year. Tax payers with a taxable income of over $1,000,000 may see a tax rate as high as 13.3 percent, rather than the current rate of 10.3 percent.
The Legislative Analysts’ Office estimate revenues for these tax plans to be around $6.8 billion annually until 2019, when these short-term fixes can be scaled back. The state cannot deny this funding to the schools, even in the event that a budget plan for the state cannot be agreed upon.
The revenue set aside by this policy is intended to be used for K-12 and community colleges. The majority of funding would go to K-12 schools at a district level which in turn would use the money at their discretion, provided they make spending decisions in an open public meeting. Administrators are unable to use the funding for salaries or any other administrative costs.
Making this tax plan a California constitutional amendment that decays in 7 years, lawmakers hope to prevent money being gleaned off by any fraud. Amending the constitution to remove this plan would require a second ballot measure and a second gathering of signatures; this protects the funding from being cancelled suddenly by the California Congressional Assembly.
With a financial crisis so dire, this plan has already been accounted for in this year’s budget plan. If the measure does not pass, California must either reduce its spending by $6 billion or come up with another way such as Prop 38 to fund schools.
Community colleges and public schools stand to lose $5.4 billion dollars according to a report compiled by the Attorney General. Massive budget cuts like these imply higher per-unit costs, bigger classes, cut programs and reduced financial aid.
Proposition 30 won’t just rescue primary schools; many public social services such as California State University and University of California are also hoping the ballots favor Prop. 30. Failure of Prop. 30 would force contingent budget cuts equal to $250 million dollars to each of these learning institutions.
Proposition 38, the opposed bill put to ballot for educational revenue, increases income tax across the board, with a sliding scale starting at a .4 percent increase for individuals making more than $7,500. Individuals who make more than $2.5 million would see a tax increase of 2.2 percent. This plan spreads the tax across the board and estimates revenue at $10 billion. However, while most of this revenue goes to K-12 and early childhood education, trigger cuts will still go into effect if Prop. 30 does not pass.
(This article graph has been updated to correctly reflect the data at http://vig.cdn.sos.ca.gov/2012/general/pdf/30-title-summ-analysis.pdf & to fix Associated Press style errors.)
