Contest 3 of 14
Proposition 3
Provides Permanent Funding for Schools and Health Care by Extending Existing Tax on High Incomes. Initiative Constitutional Amendment.
Fiscal Impact
Short Term
State takes in about $5–15 billion a year from the high-income tax.
Long Term
Same every year — the tax increase becomes permanent instead of ending in 2031.
Social Impact
- The measure makes permanent the existing tax rates on income over about $371,000 for single filers, $742,000 for joint filers, and $505,000 for heads of household.
- Tax revenues are allocated 89% to K-12 schools and 11% to community colleges, and local school boards decide how the revenues are spent.
- Supporters say keeping the rates will prevent billions in cuts to schools and health care, including teacher layoffs and larger class sizes.
- Opponents say making the tax permanent will keep California's cost of living higher and lock in up to $15 billion per year in taxes.
A YES vote means:
The higher income tax rates that top earners have paid since 2012 become permanent instead of ending in 2031, keeping about $5 to $15 billion a year; roughly 40% would go to schools and community colleges, and the rest to other state programs and reserves.
A NO vote means:
The higher tax rates on top earners end in 2031, and the state no longer receives the $5 to $15 billion a year they bring in.
Cost (Legislative Analyst): Maintains $5 billion to $15 billion of annual state income tax revenue by making a temporary tax increase on high-income earners permanent instead of letting it expire in 2031.
Source: CA Secretary of State, Official Voter Information Guide