PROP
55

TAX EXTENSION TO FUND EDUCATION AND HEALTHCARE. INITIATIVE CONSTITUTIONAL AMENDMENT.

 

OFFICIAL TITLE AND SUMMARY

PREPARED BY THE ATTORNEY GENERAL

  • Extends by twelve years the temporary personal income tax increases enacted in 2012 on earnings over $250,000 (for single filers; over $500,000 for joint filers; over $340,000 for heads of household).
  • Allocates these tax revenues 89% to K–12 schools and 11% to California Community Colleges.
  • Allocates up to $2 billion per year in certain years for healthcare programs.
  • Bars use of education revenues for administrative costs, but provides local school boards discretion to decide, in open meetings and subject to annual audit, how revenues are to be spent.

SUMMARY OF LEGISLATIVE ANALYST'S ESTIMATE OF NET STATE AND LOCAL GOVERNMENT FISCAL IMPACT:

  • Increased state revenues ranging from $4 billion to $9 billion each year (in today's dollars) from 2019 through 2030, depending on the economy and the stock market.
  • Increased funding for schools and community colleges of roughly half of the revenue raised by the measure.
  • Increased funding for health care for low‐income people ranging from $0 to $2 billion each year, depending on decisions and estimates made by the Governor's main budget advisor.
  • Increased budget reserves and debt payments ranging from $60 million to roughly $1.5 billion each year (in today's dollars), depending primarily on the stock market.

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