Unions Back Measures to Extend Proposition 30 "Temporary" Tax Increases

The old tax professional adage that “there’s no such thing as a ‘temporary’ tax increase” is again proving to be true. 

When Proposition 30 was pushed by Governor Brown, it was packaged to voters as a temporary tax increase which was necessary to help fund vital state functions in a depressed economy that resulted in low tax revenues.  Proposition 30 increased California income taxes and sales taxes, but would automatically expire at the end of 2018.

Just three years have passed since Prop 30’s passage and there are already in the works two separate ballot initiatives that would make aspects of these tax increases permanent. 

One measure is called the “Invest in California’s Children Act,” and would make permanent the higher income taxes set by Proposition 30/ The proposal would also set higher levies for households earning more than $2 million a year. This initiative is backed by the California Hospital Assn. and a chapter of the Service Employees International Union.

Another initiative, the School Funding and Budget Stability Act, was filed by the California Teachers Association and the Service Employees International Union.  Instead of making the income tax hike permanent, it would extend them until 2030. All of the money from these increased taxes  would be sent to schools and community colleges.

Considering that Proposition 13 may also be challenged in 2016 adds some additional drama to the 2016 election.   Stay tuned.