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Competing tax initiatives: Brown combines with California teachers

March 14, 2012 12:00:00 AM PDT
After months of sniping over dueling tax proposals, Governor Jerry Brown has reached a compromise. He and backers of the so-called "Millionaire's Tax" now plan to team up on a November ballot initiative.

Wednesday evening, the compromise initiative was filed with the state attorney general.

Despite the popularity of the Millionaire's Tax initiative, Governor Brown convinced the plan's major backers, the California Federation of Teachers, to team up with him to create a new measure that has elements from both his plan and theirs.

It appears the Governor won major concessions:

  • Instead of targeting millionaires, a 1-percent income tax surcharge will apply to high-wage earners like the governor originally wanted, starting at $250,000 a year for singles and $500,000 a year for married couples.
  • Californians earning more would see bigger increases, up to 3 percent, which would last for seven years instead of five.
  • The sales-tax hike is now smaller, at a .25 percent, and will be in effect for four years.

The agreement would generate about $8 billion per year more, at its height, for the state budget.

That leaves now just two tax measures on the ballot, increasing the changes one of them might pass.

There's a third initiative, brought forward by wealthy Los Angeles attorney Molly Munger, called the Our Children Our Future Act, which raises income tax on the a sliding scale, and would help fund only public schools and specifically ensures kids get a complete education by bringing back things that parents want, like art classes and counselors.

"We're definitely looking at a winning strategy," said Brown. "Having three measures on the ballot is a lot more difficult than two. One would be better."

It's unclear what lead to the compromise, but support for the governor's original plan had dropped in recent opinion polls, and the Millionaire's Tax campaign lacked funding.

Tax opponents believe the governor is bowing to his liberal union interests when he doesn't need to, considering the economy is getting better.

"I think it's the wrong direction," said Republican Floor Leader state Assm. Curt Hagman (R-Chino Hills). "And I think he is kind of trying to keep multiple groups in his party happy and try to bring them all to the table, but it's very difficult because they all have their own agenda."

The governor now has the difficult task of gathering about 1 million verified signatures by early May to qualify for the November ballot. That's considered a tight turnaround, but paying workers more than the normal $1-per-signature rate might do the trick.

"It's a big hill to climb, but it's doable," said Senate President Darrell Steinberg (D-Sacramento). "The hill in no way is too high."

But just in case, Brown is still pursuing signatures for his original plan so that something of his qualifies for the November ballot.


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