Produced by KQED News and The CaIifornia Report

Feeling a bit overwhelmed by the upcoming election?
CaliIornians are voting on some big issues this election, ranging Irom the death penalty to taxes to Iood
labeling. Making an inIormed decision can be a tough.
Don't panic.
We've created this guide to the 2012 state ballot measures with you in mind. We took each proposition on
the CaliIornia ballot and pulled it apart to extract just the main points and most important arguments.
Simple. Understandable. Portable. Shareable.
You can take this guide with you to your polling place, download the printable version or pull it up on
your smart phone or tablet.
You can also post any part oI this guide on your blog or website simply click the embed button on any
page. And oI course, you can share the guide with your Iriends on Twitter and Facebook.
Are you ready? Good. Let's dive in...
Governor Jerry Brown's Tax Increases for Education and PubIic
Proposition 30 raises personal income tax rate on individuals making more than $250,000
a year and couples making more than $500,000 a year for the next seven years.
It raises state sales tax by a quarter of a cent for four years.
Those additional tax dollars would go to K-12 schools and community colleges.
The measure also guarantees local governments will receive a basic level of funding each
year to implement realignment.
Revenue from Prop. 30 is built into this year's budget. If it fails, education and public safety
programs would lose $5.9 billion between now and next July.
Budget Impact: The Legislative Analyst's Office estimates the tax increases would bring in
an estimated $6 billion annually for seven years.
AIter the Legislature deIeated Governor Jerry Brown's plan to increase income
taxes he pledged to take the decision to the voters Proposition 30 is the
result. This year's state budget counts on the money Irom this proposition.
What Prop. 30 Changes
SchooIs - Establishes a new fund: the Education Protection Account. While the fund is
technically part of the general fund, the money there can only be spent on K-12 schools
and community colleges.
PubIic Safety - Guarantees local governments will have funding each year for public
safety services realignment, which is the process of transferring inmates from state prisons
to local jails. It does so by enshrining public safety funds in the California constitution.
The Tax Hikes
Raises the income tax rate on individuals who earn more than $250,000 a year and couples who earn more
than $500,000 a year. The income tax rate will go up on a sliding scale, Irom a one percent increase at the
low end to a three percent hike Ior the highest earners. The tax lasts seven years. The measure also raises
the state sales tax by a quarter oI a cent Ior Iour years.
Where the Money Goes
It's estimated the taxes would bring in $6 billion Ior this year's budget. The money Ilows into the Education
Protection Account, in the general Iund. That additional money helps the state meet it's education Iunding
requirement, under Proposition 98 that sends about 39 percent oI general Iund money to K-12 schools
and community colleges. The CaliIornia Department oI Finance estimates the measure would yield an
additional $2.9 billion Ior education next year.
What Happens if Prop. 30 FaiIs
This year's state budget includes "trigger cuts" iI the measure Iails. K-12 schools and community colleges
would lose $5.35 billion. The University oI CaliIornia and CaliIornia State University systems would each
lose $250 million. City police departments, CalFire, the park system, Ilood control programs and others
would also lose several million dollars each.
What Happens if Props 30 and 38 Both Pass
The state constitution says that when income tax measures conIlict, the one with the most votes prevails. So
iI Prop. 38 passes with more votes, income tax rates would increase according to Prop. 38 and trigger Prop.
30's cuts. The Franchise Tax Board or the courts would have to step in to determine whether Prop. 30's
sales tax increase or guarantee oI realignment Iunding would still be enacted.
Supporters say...
CaliIornians who have prospered should give more to sustain public schools. They also say the measure
establishes the Iirst guarantee Ior public saIety Iunding in the CaliIornia Constitution.
Governor Brown, the League oI Women Voters, the CaliIornia Teachers Association, the CaliIornia
Federation oI Teachers, SEIU Local 1000 and the Democratic State Central Committee support the
Opponents say...
the measure is a large tax increase, hurts small business and doesn't guarantee new money Ior education
beyond existing general Iund spending.
Main opponents are the Howard Jarvis Taxpayers Association and Joel Fox, president oI the Small
Business Action Committee and author oI political blog Fox&Hounds.
Revises the State Budget Process
Proposition 31 establishes a two-year budget cycle instead of the current one-year budget
It permits the Governor to make unilateral budget cuts during fiscal emergencies if the
Legislature does not act within 45 days.
It requires all bills in the California Senate or Assembly to be published three days prior to
a vote.
Lawmakers must identify a funding source for new programs or tax deductions that would
cost more than $25 million.
It requires performance reviews of all state and local programs, and sets performance
goals for all state and local budgets.
It allows local governments to alter how some state laws and regulations apply to them,
unless the legislature or state agency vetoes the changes.
Budget Impact: The Legislative Analyst's Office estimates the measure will cost millions to
tens of millions of dollars annually. It would also transfer $200 million annually from the
state to local governments.
One thing most CaliIornians seem to agree on is that state government should
be transparent, accountable and Iiscally responsible. Proposition 31 is a grab-
bag attempt at all those reIorms and more.
bag attempt at all those reIorms and more.
What Prop. 31 Changes
Establishes a two-year budget cycle. Beyond that it's complicated, so here are details:
Authorizes New Community Action PIans
This measure deIines speciIic goals Ior the state budget and all local government budgets: increase
employment, improve education, decrease poverty, decrease crime and improve health. It allows local
governments to establish "Community Strategic Action Plans" to meet these goals, and requires that
someone report on how programs are meeting them.
It allows local governments to alter how some state laws and regulations apply to them, unless the
legislature or state agency vetoes the changes.
How Do You Pay for the Action PIans?
The measure allocates $200 million a year in sales tax revenue Ior local governments that have adopted
Action Plans. Local governments could also transIer property taxes among themselves as they see Iit.
CaliIornia taxpayers pay about $50 billion annually in property taxes.
Changes How Lawmakers BaIance the State Budget
Legislators would have to identiIy a Iunding source Ior each new program, expanded program or tax cut
that costs more than $25 million. Currently, lawmakers must balance the overall state budget, but do not
have to identiIy speciIic oIIsets Ior each budget increase or cut.
Expands Governor's Budget Power
Currently, when the Governor declares a Iiscal emergency, the Legislature has 45 days to address the
revenue shortIalls. Under Prop. 31, iI lawmakers Iail to act the Governor could make unilateral budget cuts.
BiII PubIishing
The measure would stop legislators Irom hijacking a bill at the last minute to include oIten-unrelated
measures. Lawmakers could still gut a bill but they would have to publish all bills, including the budget,
three days prior to a vote.
Supporters say...
the measure increases local control and imposes rigorous oversight oI state and local budgets.
Proposition 31 was put Iorward and is largely Iunded by the political arm oI the reIorm group CaliIornia
Forward. The CaliIornia Republican Party also supports the measure, although some local branches are
against it.
Opponents say...
new oversight requirements would cost millions to tens oI millions oI dollars annually. The measure also
puts at risk state regulations meant to protect things like the public health or the environment by allowing
local governments to alter these regulations.
Opponents include the CaliIornia Democratic Party, CaliIornia Federation oI Teachers, CaliIornia League
oI Conservation Voters, CaliIornia Tax ReIorm Association and Health Access CaliIornia. The East Bay
Tea Party is also against the measure.
Limits Certain PoIiticaI Donations
Proposition 32 prohibits unions and certain types of corporations from donating directly to
political candidates and ballot measure campaigns. Exempts individuals, LLCs,
partnerships and real estate trusts.
It exempts the largest and fastest-growing type of political spending, known as
"independent expenditures." This is the political spending of super PACs, which can raise
and spend unlimited amounts.
It prohibits organizations from using payroll deductions for any kind of political purpose,
even if the employee has given permission. This prohibition primarily affects unions, since
corporations raise political money through other means.
It prohibits government contractors from contributing to elected officials who play a role in
awarding their contracts.
Budget Impact: The Legislative Analyst's Office estimates the measure would cost $1
million annually for enforcement.
Proposition 32 would prohibit unions and some kinds oI corporations Irom
contributing directly to candidates or campaigns. It would ban government
contractors Irom contributing to elected oIIicials who play a role in awarding
their contracts. It would also prohibit using payroll-deducted Iunds Ior any
political purpose.
What's tricky about Prop. 32 is the Iine print.
Restrictions on Fundraising
The measure would speciIically restrict unions' method oI Iundraising Ior political purposes, since unions
are about the only entities that use payroll deductions Irom their members to raise money Ior political
causes. Corporations tend to make political donations Irom their own coIIers.
This is the third ballot measure in 15 years that businesses have put Iorth to limit unions' political
Independent Expenditures
Most political spending is either a political contribution Ior a candidate or a campaign, or an independent
expenditure. Prop. 32 limits political contributions but not independent expenditures.
An independent expenditure is money spent on behalI oI the candidate or a campaign, without being
directed by that candidate or campaign. This is the political spending oI so-called super PACs and other
political organizations, which can raise and spend unlimited amounts.
political organizations, which can raise and spend unlimited amounts.
Who's Spending What?
Businesses currently outspend unions in CaliIornia politics. According to the Center Ior Investigative
Reporting, Irom 2001 to 2011, top labor unions spent $284 million in CaliIornia on initiatives, candidates
and parties. During that same time, top contributors among business interests spent $700 million. Neither oI
these Iigures includes donations to super PACs.
II you include PACs and independent expenditures, businesses nationally had a 15 to 1 Iundraising
advantage over labor unions in 2012, according to the Center Ior Responsive Politics.
Supporters say...
the measure would stop special interest groups Irom controlling Sacramento.
Two oI CaliIornia's top three billionaire spenders, Jerry Perenchi and Charles Munger, have donated
substantially to Prop. 32. Other supporters include the CaliIornia Republican Party, the Howard Jarvis
Taxpayer Association and Democrats Ior Education ReIorm.
Opponents say...
the measure unIairly limits unions and would not stop special interest spending, since it does nothing to
stem the Ilood oI money to super PACs.
Major opponents oI Prop. 32 include the League oI Women Voters, the CaliIornia Democratic Party and
most labor unions, including the CaliIornia School Employees Association, the AFL-CIO and SEIU.
Changes Car Insurance Rates
Proposition 33 would allow drivers to maintain a "continuous coverage" auto insurance
discount even if they switch insurers.
Drivers with lapses in coverage during a five-year period could face increased auto rates,
with three exceptions.
Currently, the California insurance commissioner reviews and approves auto insurance
rates. Prop. 33 would allow insurers to raise rates for drivers who have not had continuous
coverage, without getting approval from California's insurance commissioner.
Budget Impact: The Legislative Analyst's Office estimates the net impact would be
CaliIornia's insurance commissioner regulates rates and determines what
discounts auto insurance companies can give to drivers. Insurance companies
use up to 16 Iactors to set rates, including how many miles you drive, your past
accident history and how long you've been insured with the same company.
What Proposition 33 Changes
When you want to change your auto insurance company, you can lose the company's "loyalty" discount.
Prop. 33 would allow auto insurance companies in CaliIornia to charge you more or less based on how
long you've been insured with any company under a new "continuous coverage" provision.
Who's EIigibIe for Lower Rates
Drivers who have maintained their auto insurance Ior Iive years. Drivers who aren't insured, or who have
had a lapse in coverage in the last Iive years, are eligible Ior rate deductions iI the lapse was:
90 days or less, for any reason
18 months or less if the reason was unemployment due to being laid off or furloughed
for active military service
So iI you've had a lapse in auto insurance because you were ill, or decided to take the bus Ior a year, or
never had insurance to begin with, auto insurers would be allowed to charge you a higher rate, without
getting approval Irom the state commissioner.
Supporters say...
the measure would lower auto insurance rates Ior responsible drivers. People could take advantage oI
discounts and pressure their current insurers Ior lower rates by being able to switch companies and
maintain a "continuous coverage" discount.
Prop. 33 is almost entirely Iunded by George Joseph, the chairman oI Mercury General Corporation, an
insurance company. In 2010, Mercury Corporation spent $16 million on a similar measure, Proposition 17,
which was deIeated. As oI late September Joseph had donated $8.4 million to the current campaign.
Other supporters include the CaliIornia Department oI Forestry and Fire Protection IireIighters and the
CaliIornia Hispanic Chamber oI Commerce.
Opponents say...
the measure would weaken consumer protections and allow auto insurers to raise rates unilaterally. They
also argue that it would lead to more uninsured motorists because the rate hike would discourage people
Irom buying insurance.
Consumer Watchdog is the main opponent oI Prop. 33, and was a major opponent oI Proposition 17. By
late September, the Santa Monica-based organization had raised $94,000. Other opponents include the
political arm oI Consumer Reports, the Consumer Federation oI CaliIornia and the CaliIornia Nurses
RepeaIs the Death PenaIty
Proposition 34 repeals the death penalty and replaces it with life imprisonment without the
possibility of parole.
It applies retroactively.
It requires people convicted of murder to work while in prison and specifies that part of
their pay will go to crime victims.
It creates a new fund to help law enforcement solve rapes and homicides more quickly. A
total of $100 million would be transferred from the general fund to this project over four
Budget Impact: The Legislative Analyst's Office estimates California would initially save
$100 million a year, and would transfer part of this to the new fund for four years.
Eventually, the state would save $130 million annually.
Currently, a person convicted oI Iirst-degree murder in CaliIornia can be
sentenced either to death or liIe in prison without parole when certain "special
circumstances" have been proven, Ior example, the killer used a bomb, or the
victim had been kidnapped or was a police oIIicer.
Since the death penalty was reinstated in 1978, about 900 people have been sentenced to death. OI those,
14 have been executed, 83 have died beIore their execution date and 75 have had their sentences reduced
by the court as oI July 2012, according to the CaliIornia Department oI Corrections and Rehabilitation.
What Proposition 34 Does
Eliminates the death penalty, making Iirst-degree murder with special circumstances punishable only by liIe
in prison without parole. It also changes the sentence oI the 725 oIIenders who are currently on Death Row
to liIe imprisonment without the possibility oI parole.
Does it Save Money?
Court proceedings to execute an inmate can take decades, according to the state Legislative Analyst's
OIIice. The LAO estimates that iI the death penalty is repealed the state and counties could save about
$100 million annually in trial and appeals litigation and corrections costs; aIter several years that savings
would grow to an estimated $130 million annually.
Those savings would be somewhat oIIset by a special Iund the measure would create that sets aside $100
million Ior grants to local law enIorcement to help investigate homicides and sex crimes. That money
would come Irom the General Fund over Iour years. In 2009, about 47 percent oI homicides and 68
percent oI rapes were unsolved, according to the Attorney General's oIIice.
Supporters say...
the measure would save CaliIornia millions oI dollars and prevent the possibility oI executing an innocent
Former San Quentin warden Jeanne WoodIord initiated the measure. The ACLU, CaliIornia Democratic
Party, League oI Women Voters and the CaliIornia ConIerence oI Catholic Bishops support the measure.
Opponents say...
the measure lets criminals escape justice.
Many law enIorcement associations oppose the measure, including the CaliIornia State SheriIIs'
Association and the CaliIornia District Attorneys Association. The state Republican Party is also against
the measure.
Increases PenaIties for Human Trafficking
Proposition 35 increases the prison terms and fines for human trafficking.
It expands the definition of human trafficking to include distribution of child pornography.
It directs the money collected from fines to victims' services and law enforcement.
It requires sex offenders to give local law enforcement their online identities and Internet
access information.
It requires training for police officers in how to handle human trafficking cases.
It prohibits using evidence of the victim's prior sexual conduct in court.
Budget Impact: The Legislative Analyst's Office estimates local governments across the
state could spend a few million dollars in one-time training costs, plus a few million dollars
annually on increased prosecution and corrections costs. Fines would generate several
million dollars annually for victims' services, prevention and rescue operations.
There are two categories oI human traIIicking: sex traIIicking and labor
traIIicking. Most human traIIicking cases are tried in Iederal courts, so
Proposition 35 would aIIect the small number oI cases handled by CaliIornia
courts. As oI March 2012, only 18 such oIIenders were in state prison.
What Prop. 35 Changes
Prop. 35 would expand the deIinition oI human traIIicking to include crimes related to creating and
distributing child pornography. So a person could be convicted oI human traIIicking Ior duplicating child
pornography, even iI the oIIender had no contact with the child.
Increased PenaIties
The maximum prison term would go Irom Iive years to eight years Ior labor traIIicking; Iive years to 20
years Ior sex traIIicking; and eight years to liIe in prison Ior Iorcibly sex traIIicking a minor. The maximum
Iine would go up Irom $100,000 to $1.5 million.
The measure requires sex traIIickers to register as sex oIIenders. Registered sex oIIenders would have to
give the local police or sheriII's department the names oI their Internet providers and their online identities,
such as user names and email addresses.
Where Does the Money Go?
Seventy percent oI the money Irom Iines would go to victims' support services and 30 percent would go to
law enIorcement activities related to traIIicking, including prevention, witness protection and rescue
Supporters say...
the measure would prevent human traIIicking through increased penalties, law enIorcement training and
The majority oI Iunding Ior Prop. 35 comes Irom Iormer Facebook executive Chris Kelly, who Iounded
the SaIer CaliIornia Foundation. CaliIornia Against Slavery, the CaliIornia Police ChieIs Association and
the Peace OIIicers Research Association oI CaliIornia also back the measure.
Opponents say...
the measure limits online Iree speech. The measure could make it harder to help victims leave sex work by
ending the crime oI misdemeanor prostitution. The measure could be challenged in court because including
the "intent to distribute obscene matter" could be considered unconstitutionally vague and lengthening
prison sentences could be considered cruel and unusual punishment.
The ACLU oI Northern CaliIornia has come out against the measure. The Erotic Providers Legal,
Education and Research Project Inc. is the major opponent.
Revises the Three Strikes Law
Proposition 36 revises criminal penalties so people convicted of a third-strike felony will
receive a life sentence only when the crime was serious or violent.
It maintains life sentences for felons with non-serious, non-violent third strike convictions if
prior convictions were for rape, murder or child molestation.
Current prisoners convicted of a non-serious, non-violent third-strike felony could apply for
a reduced sentence.
Budget Impact: The Legislative Analyst's Office estimates the resentencing trials would
cost a few million dollars over several years. However, that would be more than offset by
$70 to $90 million annual savings.
In 1994, voters passed Proposition 184, the Three Strikes law. It changed the
sentencing Ior anyone convicted oI a Ielony who also has a previous violent or
serious Ielony conviction.
What's a VioIent or Serious FeIony?
Violent Ielonies include murder, robbery and rape. Most violent Ielonies are considered serious. But there
are other Ielonies, such as non-conIrontational residential burglary, that are considered serious, but not
violent. Then there are Ielonies that are neither violent nor serious, such as stealing a car or possessing
illegal drugs, not including marijuana.
How Three Strikes CurrentIy Works
II a person has previously been convicted oI a violent or serious Ielony and is convicted oI a QHZ Ielony,
the court can decide to sentence them under the Three Strikes law.
Second strike offense - the sentence for DQ\ new felony conviction (not just serious or
violent) doubles the normal term. So a mandatory four-year sentence becomes eight years.
Third strike offense - if a person has two or more previous serious or violent felony
convictions then the sentence for DQ\ new felony (not just serious or violent) is a life term
with the possibility of parole after 25 years. In March 2012, about 9,000 California prison
inmates were third-strikers, according to the Legislative Analyst's Office.
What Proposition 36 Changes
The measure reduces the sentence Ior a third-strike Ielony that's non-serious and non-violent Irom liIe in
prison, to a prison sentence that is twice the usual term. About a third oI current three-strikers would be
eligible to apply Ior a reduced sentence.
People convicted oI certain third Ielonies related to drugs, sex or guns would still be subject to a liIe
sentence. People with prior convictions Ior rape, murder or child molestation would also be subject to a liIe
The Cost
Prisoners who currently Iace liIe in prison because oI a non-violent, non-serious third Ielony could apply
Ior a reduced sentence. But they would still be required to serve double the normal sentence Ior their crime.
The LAO estimates that the resentencing trials would cost a Iew million dollars over several years.
However, that would be more than oIIset by $70 to $90 million annual savings Irom shortening some
prison stays.
Supporters say...
the measure makes the punishment Iit the crime. It would also save CaliIornia millions oI dollars annually
and help with prison overcrowding.
StanIord Law School ProIessor David Mills draIted the measure with lawyers Irom the NAACP Legal
DeIense Fund, in consultation with law enIorcement oIIicials. The District Attorneys in San Francisco and
Santa Clara support the measure. Major Iinancial backers include David Mills, the NAACP and George
Opponents say...
the measure reduces prison sentences and could release criminals with previous violent Ielonies. They also
argue that the measure is unnecessary as judges already have some leeway in deciding when to apply
Three Strikes.
Most law enIorcement organizations are against the measure, including: the CaliIornia Police ChieIs
Association, CaliIornia State SheriII's Association, CaliIornia District Attorneys Association and Los
Angeles Police Protective League. The Peace OIIicers Research Association oI CaliIornia is the main
Iinancial backer oI the opposition campaign.
LabeIs GeneticaIIy Engineered Foods
Proposition 37 requires labels on all raw foods that have been genetically engineered, and
all processed foods that contain ingredients that were genetically engineered.
Genetically engineered foods could not be labeled "natural," a term that is not currently
Certain products are exempt, including: alcoholic beverages, prepared foods, medicine
and animal feed.
Budget Impact: The Legislative Analyst's Office estimates Prop. 37 will cost up to $1
million for the state Department of Public Health inspections.
As consumers we have been eating genetically engineered Ioods since 1994.
Most genetic modiIications are to seeds to help them grow in adverse climates,
mature Iaster or become resistant to pests or herbicides.
In 2011, 88 percent oI all corn and 94 percent oI all soybeans produced in America were grown Irom
genetically engineered (GE) seeds, according to the U.S. Department oI Agriculture. Other common GE
crops are canola, papaya, sugar beets and zucchini.
What Proposition 37 Changes:
Currently, consumers do not know what Ioods have been genetically engineered. Under Prop 37, all Ioods
that have been genetically engineered, or contain GE ingredients will be labeled.
What's Exempt
The measure exempts alcoholic beverages, medicines, Iood served at restaurants, pet Iood and animals that
eat GE Ioods. So milk and beeI Irom cows that eat GE corn would not be labeled, but soymilk Irom GE
soybeans would be. Organic Ioods, since they already must not be genetically engineered would also not
be labeled.
Who's ResponsibIe
Retailers, such as grocery stores, would be required to label bulk Ioods and produce. For every product
without a label, retailers would have to get a sworn statement Irom the provider oI the product or receive
independent certiIication.
MedicaI Opinions
More than 40 countries label GE Ioods, including all European Union nations, India and China. America
does not. The Food and Drug Administration and World Health Organization say genetically engineered
Ioods do not present a saIety concern. The American Medical Association agrees that's what current
research shows, but says it would like to see more testing.
Supporters say...
there's a dearth oI peer-reviewed studies on the eIIects oI GE Ioods on human health, and thereIore such
Ioods should be labeled. Consumers have a right to know how their Iood is produced.
Major donors include the Organic Consumers Fund, Dr. Bronner's Magic Soaps and Nature's Path Foods,
who had raised $3.9 million dollars by late September.
Opponents say...
people seeking non-GE Ioods can eat organic products. Some scientiIic organizations say labeling is a
scare tactic. They argue genetic engineering is a tool that can help Iight hunger and ward oII pests.
Companies also warn the measure could drive the price oI Iood up, as they will pass the cost oI complying
to the consumer.
The list oI opponents includes many large Iood corporations, such as PepsiCo, Coca-Cola, Kellogg,
General Mills, Sara Lee, KraIt and Nestle. Monsanto, a leading producer oI GE seeds, is the largest donor
against the campaign. All told, opponents had raised about $32.5 million by late September.
MoIIy Munger's Tax Increases for EarIy Education and K-12
Proposition 38 increases income tax rates on almost all Californians until 2025.
The money would go to K-12 public schools and early education programs, on top of
school funding guaranteed by state law. For the first four years, revenues would also help
pay down California's debt.
Prop. 38 isn't tied to this year's state budget, so if this measure passes with more votes
than Prop, 30, it will trigger $5.9 billion in cuts to education and public safety programs.
Budget Impact: The Legislative Analyst's Office estimates Prop. 38 would bring in about
$10 billion annually in increased taxes. During the initial four years, about $6 billion would
be used for schools, $1 billion for early education programs and $3 billion for debt
One oI two income tax propositions on this year's ballot, Proposition 38
increases tax rates on most CaliIornians Irom 2013 through 2024, to Iund
public education and pay down the state debt.
Because Prop. 38 isn't tied to this year's state budget, iI it passes with more votes than Prop. 30, education
and public saIety programs would still lose $5.9 billion between now and next July. That's because state
legislatures included "trigger cuts" to trim the budget iI Prop. 30 Iails.
What Prop. 38 Changes
Here's the breakdown oI the tax increases:
SingIe fiIer's annuaI taxabIe income Joint fiIers' annuaI taxabIe income Tax increase
under Prop. 38
$0 - $7,316 $0 - $14,632 0%
7,316 - 17,346 14,632 - 34,692 0.4
17,346 - 27,377 34,692 - 54,754 0.7
27,377 - 38,004 54,754 - 76,008 1.1
38,004 - 48,029 76,008 - 96,058 1.4
48,029 - 100,000 96,058 - 200,000 1.6
100,000 - 250,000 200,000 - 500,000 1.8
200,000 - 500,000 500,000 - 1,000,000 1.9
500,000 - 1,000,000 1,000,000 - 2,000,000 2
1,000,000 - 2,500,000 2,000,000 - 5,000,000 2.1
More than 2,500,000 More than 5,000,000 2.2
Where Does the Money Go
The Legislative Analyst's OIIice estimates the measure would raise $10 billion Ior next year's state budget.
During the Iirst Iour years, 60 percent oI revenues would go to K-12 schools, 30 percent to repaying state
debt and 10 percent to early childhood education. Beginning in Iiscal year 2018, the Iunding would shiIt:
85 percent oI revenues would go to K-12 schools and 15 percent to early childhood programs.
These revenues would be added to the money K-12 schools already receive Irom the state's general Iund.
How SchooIs Can Use the Money
Right now, district school boards decide how to spend most oI the money they get. Prop 38 has strict rules
on how school districts can spend the money, with speciIic amounts designated Ior technology and low-
income students, Ior example. None oI the Prop. 38 Iunding could be spent on salaries or pensions. Prop.
30 designates the new tax money Ior classroom spending only, with none to be spent on administration.
What Happens if Proposition 30 and 38 Both Pass
The state constitution says when income tax measures conIlict, the one with the most votes prevails. So iI
Prop. 38 passes with more votes, income tax rates would increase according to Prop. 38 and, and without
Prop. 30, automatic budget cuts would be triggered. The Franchise Tax Board or courts would then have
to step in to decide whether Prop. 30's sales tax or guarantee oI realignment Iunding would still take eIIect.
Supporters say...
the measure guarantees additional Iunding Ior education outside oI the general Iund.
Lawyer Molly Munger is the main supporter and Iunder oI Prop. 38. By late September she had spent
almost $30 million on the proposition. The CaliIornia State Parent Teacher Association supports Prop. 38.
Most supporters oI Prop. 30, such as the CaliIornia Democratic Party and teachers' unions, have not taken
a stand on Prop. 38.
Opponents say...
the measure is a huge tax hike Ior middle-income taxpayers and small businesses, whose owners pay
income taxes as individuals instead oI as corporations.
The CaliIornia Business PAC, sponsored by the CaliIornia Chamber oI Congress, is one oI the Iew donors
against the measure, as oI mid-September. The CaliIornia State SheriIIs' Association is also opposed.
Increases Taxes on MuItistate Business, Funds CIean Energy
Proposition 39 would require "multistate businesses" to calculate their California income
tax based on what percentage of their sales are in the state.
Currently, multistate businesses can choose instead to pay taxes based on three factors,
including the number of employees they have in the state. This can lower taxes for
businesses who have fewer employees here.
It dedicates up to $550 million annually for five years to fund alternative energy projects.
Budget Impact: The Legislative Analyst's Office estimates California would gain about $1
billion in additional tax revenues. For the first five years, about half of that would go to
alternative energy projects.
A corporation "does business" in CaliIornia based on how much property or
how many employees it has here, or how much it earns here.
A company that has one quarter oI its sales, property, or payroll in CaliIornia is "doing business" here. So
is a company that earns more than $500,000 here, has property worth more $50,000 or spends more than
$50,000 on payroll in the state.
Right now multistate businesses can choose the Iormula Ior determining how they pay income taxes. And
while only a small portion oI businesses in CaliIornia work across multiple states, they pay the majority oI
the state's corporate income tax. In Iiscal year 2010-11, the corporate income tax raised $9.6 billion, the
third-largest general Iund revenue source.
What Proposition 39 Changes
Multistate businesses would have to pay their income tax based on what percentage oI their sales are in
CaliIornia. A company that sells one-quarter oI its product here would pay income tax on one-quarter oI
total proIit. Companies would no longer have a tax incentive to keep their CaliIornia staII small.
The Legislative Analyst's OIIice estimates the change would bring in an extra $1 billion annually.
Where Does the Money Go?
Prop. 39 establishes a new state Iund: the Clean Energy Job Creation Fund. For Iive years, halI oI the new
money raised (up to $550 million) would go into that Iund, to be spent on:
Energy efficient retrofits and alternative energy projects in public facilities, such as solar
panels on a school roof;
Financial and technical assistance for the retrofits;
Job training in clean energy and energy efficiency for veterans and disadvantaged youth.
The rest oI the money would go into the state's general Iund.
Supporters say...
the measure closes a tax loophole costing CaliIornia $1 billion annually. That money could then support
clean energy and education.
Prop. 39 is almost entirely Iinanced by hedge Iund manager Thomas F. Steyer, who is also the co-chair oI
CaliIornians Ior Clean Energy & Jobs, the other major Iunder. Supporters include the Latin Business
Association and the Los Angeles Business Council.
Opponents say...
the measure attacks businesses that provide jobs. They also argue that the measure spends up to $22 million
on a new clean energy bureaucracy that has little accountability.
As oI late September there were no committees registered with the CaliIornia Secretary oI State opposing
Prop. 39. In the oIIicial state voter guide, the Iollowing organizations oppose it: CaliIornia ManuIacturers
& Technology Association, National Tax Limitation Committee, CaliIornia Asian PaciIic Chamber oI
Commerce and Friends Ior Saving CaliIornia Jobs.
Referendum: Approves Current State Senate District Boundaries
Proposition 40 is one of those backwards measures, where a "yes" vote doesn't change
anything, and a "no" vote changes a lot.
A yes vote on Prop. 40 keeps in place the new state Senate district boundaries created by
the independent Citizens Redistricting Commission.
A no vote throws out the state Senate districts created by the Citizens Redistricting
Commission. The California Supreme Court would then appoint officials to redraw state
Senate district boundaries.
The original backers of this measure no longer support it.
Budget Impact: The Legislative Analyst's Office estimates that if Californians vote no, the
state would spend about $500,000 and counties statewide would spend another $500,000
to develop materials, such as new precinct maps.
Political district boundaries get re-drawn every 10 years aIter the U.S. Census
has determined how many people are living where. In 2008 and 2010, voters
passed measures creating a Citizens Redistricting Commission to redraw the
boundaries oI Congressional, CaliIornia Senate and Assembly and Board oI
Equalization districts. Those are now CaliIornia's current district boundaries.
What Proposition 40 Changes
Nothing. But it still takes a "yes" vote to keep in place the state Senate districts created by the Citizens
Redistricting Commission. II Prop. 40 Iails, those districts get thrown out, and the new districts would be
drawn by a panel oI oIIicials appointed by the CaliIornia Supreme Court.
Why is Prop. 40 on the BaIIot?
The CaliIornia Republican Party sponsored this reIerendum to overturn the new state Senate districts. The
GOP then asked the state Supreme Court to rule on whether the new maps or the old maps would be used
Ior the November 2012 election. In January, the state's high court ruled that the district maps drawn by the
Citizens Commission must be used in 2012.
So on July 12, the supporters oI Prop. 40 announced they're no longer campaigning Ior people to vote
"no." However, the measure remains on the ballot because there's no way to remove measures that have
qualiIied via a signature campaign.
A LittIe Context
BeIore 2010, the state legislature decided CaliIornia's political boundaries. The Citizens Redistricting
Commission was an eIIort spearheaded by Governor Arnold Schwarzenegger to make the process more
transparent and less political.
Supporters say...
voting "yes" protects the work oI an independent commission created by voters.
The League oI Women Voters oI CaliIornia, AARP CaliIornia, CaliIornia Chamber oI Commerce, the
CaliIornia Democratic Party and now the CaliIornia Republican Party all support a yes vote.
Opponents say...
The CaliIornia Republican Party has withdrawn its support Ior a "no" vote.