The California Student Aid Commission has come out in favor a ballot proposition to temporarily raise taxes to increase education and public safety funding. If Proposition 30 passes in November, the non-partisan Legislative Analysts Office estimated that the new taxes will generate $6.8 billion in revenue.
In a written statement Diana Fuentes-Michael, the commission’s executive director, said that Proposition 30 “will provide much needed new revenues to help fund education and balance California’s budget.” Despite years of draconian cuts, California schools are still facing a $6 billion deficit. The size of the deficit will force further cuts if Proposition 30 doesn’t pass.
According to the University of California, if Proposition 30 fails both UC and California State University would see their state appropriations cut by $250 million. An additional $125 million, pledged to UC by state lawmakers as part of a deal to keep student fees at 2011-2012 levels, would also be cut from the university’s budget.
To stave off any additional cuts to education funding, Proposition 30 will raise California’s sales tax to 7.5% and create four new high-income tax brackets. If Proposition 30 passes the new tax brackets—delineated at $250,000, $300,000, $500,000, and $1 million—will all be taxed at rates above 10%.
Families in the $250,000 tax bracket will see their taxes raised from 9.3% to 10.3%. Households in the $300,000 tax bracket will see their taxes go up to 11.3% from 9.3%. Those in the $500,000 tax bracket will have be paying 12.3% tax on their income, up from 9.3%. Those who make over $1 million per year will pay a 13.3% tax rate, up from the current “millionaires’ tax” rate of 10.3%.
The increases will be in effect for seven years and, based on California Franchise Tax Board data from 2009, will only affect the top 3% of California taxpayers. Proposition 30 is supported by almost 60 different school districts, faculty associations, teacher federations, student governments, school employee unions.
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