Prop 24 disputed by business, teachers

LOS ANGELES California has some of the highest taxes in the country. Businesses say its hurting their ability to compete with other states.

In 2009 the legislature passed a law that would reduce a number of business taxes but some people say it's no time to cut revenues.

"In the middle of the budget disaster we would cut $30 billion," said teacher Lori Adams who supports the initiative to change the law. "The legislature cuts us $30 billion and gives large corporations a $1.3 billion tax break."

The California Teachers Association is the main sponsor of Proposition 24, which would eliminate the business tax cuts that are set to go into effect in January. They believe the tax cuts would strip much needed funds from education.

"It's just draining money out of the general fund that could be used for schools. We lost 16,000 teachers last year and we already have 14,000 this year that haven't returned yet," said Adams.

But critics say the initiative will hurt business and stifle employment at a crucial time for California's economy.

"The way this initiative works it's going to be a tax on jobs," said Joel Fox with the Small Business Action Committee. "There is a possibility we will have more money for a year but in the long term we're going to lose out big and the schools will lose big."

Fox said anytime a business creates a job it would be taxed. He said it makes businesses less competitive with those in other states and more jobs will eventually leave California. He cited one study that estimated the state could lose up to 320,000 jobs.

Proposition 24 will be on the November 2 ballot.

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