4 Competing Tax Measures To Split Voters’ Attention In November

Published on

With four tax initiatives on track for the November ballot, California voters are going to have to decide how much is too much.

A pair of competing measures to extend 2012's expiring Proposition 30 tax hikes, a plan to boost the tobacco tax by $2 a pack and an initiative to put additional taxes on property valued at $3 million or more are all out on the street, with supporters working to collect enough signatures to qualify for the ballot.

While backers of each of the tax measures insist their initiative will stand on its own, there's concern that the competing cries for more money will provoke a "plague on all your houses" attitude by voters that could endanger all the initiatives.

"When people see the word 'tax' on the ballot, they think differently," said Jamie Court, president of Consumer Watchdog, which has sponsored several ballot measures over the years. If there are too many tax measures on the ballot clamoring for attention – and money – "a 'no' vote is the default for voters."

That concern grows when there are two or more tax measures with the same target, such as the initiatives seeking to extend Prop. 30.

A measure backed by the California Teachers Association would extend Prop. 30's higher tax rates on the wealthiest Californians until 2030, with an estimated $7.5 billion each year going to public schools and community colleges.

Another measure, this one by the California Hospital Association and the Service Employees International Union-United Healthcare Workers West, makes those higher tax rates permanent and sends half the annual estimated $10 billion to public schools, colleges and universities, 40 percent to Medi-Cal for low-income health care and 10 percent for early childhood development programs. It also imposes a new, higher tax rate on those who make more than $1 million annually.

3rd option possible

To make things even more confusing, negotiators for the teachers group and the hospital association have been talking about a third option, which would extend Prop. 30's higher tax rates and split the money between schools and health programs. That measure is awaiting approval from the state Attorney General's Office, and a decision about whether to aim that initiative for the ballot won't be made until later this month.

"We'd prefer one measure, especially on a crowded ballot," said Gale Kaufman, a political consultant working on the teachers' measure. "My instincts say less is better always, but it's difficult to have any hard and fast rules."

In a state where, typically, only about 1 of every 3 ballot measures is approved, anything that splits the voters' attention is bad news for an initiative's advocates.

For those looking to extend Prop. 30, "if they don't settle on one initiative, it could doom them both," said Court of Consumer Watchdog.

A crowded ballot doesn't concern Conway Collis, part of a group pushing a "Making Poverty History" initiative that would add a surcharge to the tax bill for land and buildings with an assessed value of $3 million or more.

The $6 billion raised annually would go toward programs to reduce poverty in the state, including prenatal services, expanded child care, tax credits and job training grants.

"With 2.4 million children living in poverty in California, this initiative is critical," said Collis, former chairman of the State Board of Equalization. "Our polling has shown that having other tax measures on the ballot doesn't affect us. … People have been extremely responsive and anxious to sign."

A proposed tobacco tax, which would add $2 to the price of a pack of cigarettes, also is collecting signatures for the ballot. Billionaire environmentalist – and possible 2018 candidate for governor – Tom Steyer has given $1 million to the Save Lives California effort, which would funnel about $1 billion a year toward state Medi-Cal costs, antismoking efforts and a variety of other health and antitobacco programs.

Goodwill proposals tough

A long ballot may not hurt the tobacco tax as much as the other measures, said David McCuan, a political science professor at Sonoma State University.

"Goodwill proposals like taxes to ease poverty or provide special benefits are much harder to sell than picking on sinners," like smokers and drinkers, he said.

The history of California's antismoking efforts shows that. While Prop. 29, which would have increased the tobacco tax by $1 a pack, lost by a razor-thin 50.2 percent to 49.8 percent margin in 2012, Prop. 10 in 1998 added 50 cents to the price of cigarettes and Prop. 99 in 1988 boosted the tax by a quarter.

Each tax measure is also likely to face deep-pocketed opposition if it makes the ballot. The tobacco industry, for example, spent more than $48 million to defeat Prop. 29's $1-a-pack tax four years ago and can be expected to raise a similar amount to fight a tax double that size.

Spending against measures

Business interests and antitax groups will be spending to oppose the other measures. Palo Alto Republican Charles Munger spent $33 million to fight Prop. 30 in 2012, and a group quietly financed by several California businesspeople added an additional $11 million to that losing battle.

"I don't know what's going to happen," Kaufman said. "This is the type of political year where you can say anything a year out and we'll see how smart you were a year later."

While the four tax initiatives now in circulation seem the best bets to join the seven other measures already qualified for the November ballot, there's still time for others to make the final lineup by the June 30 deadline.

There have been suggestions that a tax on oil produced in California or an initiative that would allow commercial property to be taxed at a higher rate than residences might be headed for the ballot, but there's been more talk than action in both cases.

Initiatives to fund health care, cut poverty  

Tax extension to fund education


Extends by 12 years the temporary personal income tax increases enacted in 2012 on earnings over $250,000 for single filers more than $500,000 for joint filers, more than $340,000 for heads of household. Allocates that tax revenue 89 percent to K-12 schools and 11 percent to community colleges. Summary of estimate by legislative analyst and director of finance: Increased state revenue annually from 2019 through 2030, probably in the $5 billion to $11 billion range initially.

Tax extension to fund education, health care and child development

Permanently establishes the temporary personal income tax increases enacted in 2012 for annual earnings of more than $290,000. Imposes new personal income tax on annual earnings of more than $1 million. Allocates this tax revenue 50 percent to K-12 education, community colleges and universities; 40 percent to health care for low-income individuals, and 10 percent to child care and child development programs. Establishes a reserve fund for use during state budget emergencies. Summary of estimate by legislative analyst and director of finance: Increased state revenue annually beginning in 2019, probably in the $7 billion to $15 billion range initially.

Cigarette tax to fund health care, tobacco use prevention, research and law enforcement

Increases cigarette tax by $2 per pack, with equivalent increase on other tobacco products and electronic cigarettes containing nicotine. Allocates revenue primarily to increase funding for existing health care programs; also for tobacco use prevention/control programs, tobacco-related disease research and law enforcement, University of California physician training, dental disease prevention programs and administration. Summary of estimate by legislative analyst and director of finance: Net increase in excise tax revenue in the range of $1.1 billion to $1.6 billion annually by 2017-18.

Property tax surcharge to fund poverty reduction programs

Imposes additional surcharge on real property with an assessed value of more than $3 million. Surcharge based on a sliding scale ranging from three-tenths of 1 percent for real property assessed at $3 million to eight-tenths of 1 percent for real property assessed at $10 million or more. Allocates revenue to numerous programs to reduce poverty, including prenatal services, expanded child care, early childhood education, after-school and summer programs, job training grants, tax credits and monetary aid. Surcharge expires in 20 years. Summary of estimate by legislative analyst and director of finance: Increased state revenue estimated between $6 billion and $7 billion in 2017-18.

Source: California Attorney General s Office  

Latest Videos

Latest Releases

In The News

Latest Report

Support Consumer Watchdog

Subscribe to our newsletter

To be updated with all the latest news, press releases and special reports.

More Releases