On November 6th, Californians all across the state will be casting their votes on eleven different propositions. Ten of the propositions are initiatives placed on the ballot by supporters who gathered sufficient signatures and seek to make changes in state laws or the California Constitution. The eleventh measure is a referendum placed on the ballot by citizens who also gathered sufficient signatures.

Highlights on Props 30, 32, 37, and 38:

Proposition 30 – Temporary Taxes to Fund Education. Guaranteed Public Safety Funding.
The Question:
Should the California Constitution be amended to (a) temporarily increase sales and personal income tax rates; (b) guarantee certain revenue transfers to local governments; and (c) eliminate state funding of certain mandates to local governments?

The Situation:
Temporary Taxes: The state General Fund’s three largest revenue sources are the sales tax, the personal income tax (PIT), and the corporate income tax. Prop 30’s temporary tax increases, described below, are already part of the state’s 2012-13 budget, together with mandatory spending reductions (“trigger cuts”) if it fails to pass.

Revenue Transfers: In 2011, several programs were transferred from the state to local governments, including certain prison, parole and substance abuse treatment programs, together with annual revenue transfers to local governments of approximately $6 billion.

The Proposal:
Prop 30 would increase the sales tax rate by one-quarter cent (0.25%) for calendar years 2013-2016. It would also increase the maximum 9.3% PIT rate in stages up to 12.3% (on incomes of $500,000 for single filers, $1,000,000 for joint filers) for calendar years 2012-2018. The existing additional 1% tax applicable to annual income over $1 million (with the revenue dedicated to mental health services) would continue to apply. The new revenues would provide generally unrestricted K-14 educational funding, and also benefit the General Fund.

Prop 30 would require that the state continue to fund the 2011 transferred programs, and that this funding be excluded from the calculation of the revenues going to schools under the Prop 98 minimum education funding guarantee.

Finally, Prop 30 would eliminate the state’s normal reimbursements to local governments for the costs of certain open and public meeting requirements of the Brown Act.

Fiscal Effects:
In years when both tax increases would be in effect (2012- 13 through 2016-17), annual revenues would increase by approximately $6 billion; in other years the revenues would be lower due to the phasing in/out of the tax increases. Actual revenues could fluctuate significantly from these projections because they largely come from the PIT increases.
As noted, the 2012-13 budget already relies on the Prop 30 revenues to fund various state programs, including particularly K-14 educational funding. Prop 30’s revenues would also be available to help fund the state budgets through 2018-19. Future actions of the Legislature and the Governor would determine the specific use of these funds.

If Prop 30 fails, the 2012-13 budget plan requires that the state’s spending be reduced by $6 billion, almost entirely in K-14 education and public universities. These reductions could result in shorter instructional years and lower community college enrollment, as well as greater deferral of Prop 98 funding for K-14 education.

It is not possible to determine the fiscal impact of the local government funding provisions, which would depend on future events.

Supporters Say:
– Prop 30 is the only initiative that protects school and safety funding and addresses the state’s chronic budget mess.
– Prop 30’s taxes are temporary, balanced and necessary for vital services.

Opponents Say:
– Prop 30 is a shell game; there are no assurances that tax increases will actually benefit classrooms.
– Politicians and special interests want to continue their out-of-control spending, but not make meaningful reforms.

Proposition 32 – Political Contributions by Payroll Deduction. Contributions to Candidates.
The Question:
Should unions, corporations, government contractors and state and local government employers be prohibited from using payroll-deducted funds, or in some instances their own funds, for political expenditures?

The Situation:
California and many local governments have laws covering campaign finance and related disclosure requirements, which are applicable to state and local candidates and ballot measures, but not to federal officials. Under state campaign finance laws there are three types of political spending: (1) political contributions, which include giving money, goods or services directly to a candidate, at the request of a candidate, or to a committee that supports or opposes a candidate or ballot measure; (2) independent expenditures, which are funds spent to support or oppose a candidate or ballot measure, but not coordinated with a candidate or a committee that supports or opposes a candidate or ballot measure; (3) other political spending, which is spending by an organization to communicate political endorsements to its members, employees or shareholders. There are various limits imposed on political contributions, but no such limits on independent expenditures or other political spending.

Many unions use some of the funds received through payroll deductions to make contributions to state and local candidates or candidate/ballot measure committees, or to make independent expenditures in political campaigns. Other than unions, few, if any, organizations currently use payroll deductions to finance political spending in California.

The Proposal:
Prop 32 would prohibit all organizations from using funds derived from payroll deductions for all political spending, including making contributions to state and local candidates or candidate/ballot measure committees, or making independent expenditures. It would also prohibit corporations and unions from making political contributions to candidates and their committees from their own funds, but would not prohibit them from contributing funds to ballot measure committees. The prohibition also would not affect a corporation or union’s ability to spend money on independent expenditures so long as the union or corporation does not do so using payroll deductions. Prop 32 also would prohibit government contractors (including public sector labor unions) from making contributions to elected officials who play a role in awarding any contracts, from the time the contract is being considered to the date the contract expires. None of the foregoing restrictions would affect campaign spending for federal offices such as President of the United States or members of Congress.

Fiscal Effects:
There would be increased costs to the state to investigate alleged violations of the law and to respond to requests for advice. Combined, these costs could exceed $1 million annually.

Supporters Say:
-Prop 32 prohibits money for political purposes from being deducted from employees’ paychecks without their permission
-Prop 32 prohibits both corporate and union special interest contributors to politicians

Opponents Say:
-99% of California corporations don’t use payroll deductions for political contributors, so Prop 32 would only affect unions
-Business Super PACs and independent expenditure committees are exempt from Prop 32’s controls

Proposition 37 – Genetically Engineered Foods. Labeling.
The Question:
Should labeling be required on foods containing genetically modified ingredients when such foods (whether raw or processed, plant or animal) are offered for sale to consumers in California?

The Situation:
According to some estimates, 40% to 70% of the foods currently for sale in California contain some genetically modified (GM) ingredients, sometimes referred to as genetically engineered (GE) ingredients or genetically modified organisms (GMO). Genetic modification changes (alters) an organism’s genome, or hereditary information, in order to produce some desired change in that organism’s characteristics. For example, it may improve a plant’s resistance to pests, or allow it to withstand the use of pesticides.

No existing law regulates GE foods or requires food producers to identify foods produced through genetic engineering.

The Proposal:
Proposition 37 would change state law to require specific kinds of disclosure regarding genetically modified foods. It would require the labeling of raw or processed food offered for sale to consumers if it is made wholly or partially from plants or animals with altered genetic material. It would also prohibit the labeling or advertising of genetically altered food as “natural.” Foods made from animals that are not genetically engineered, but are given genetically engineered feed would be exempted from Prop 37. Foods sold in restaurants and alcoholic beverages would also be exempt. Foods that are certified organic are exempt from Prop 37, as they are not legally allowed to contain any genetically altered ingredients.

The State Department of Public Health, which regulates the safety and labeling of foods, would develop the regulations necessary to put Prop 37 into effect. Any state or local official or private individual would be allowed to sue for violation of the labeling provisions.

Fiscal Effects:
The fiscal effects are unknown, but could potentially increase state administrative costs up to one million dollars annually to monitor compliance with the disclosure requirements specified in the measure.

Supporters Say:
-Genetic engineering of plants and animals often causes unintended consequences and can lead to adverse health and/or environmental effects.
-It would cost food producers very little to change their labels so that consumers could make informed decisions.

Opponents Say:
-The regulation would require extra monitoring of foods and would open the door to frivolous lawsuits.
-Food producers unwilling or unable to modify their packaging would be forced to switch to higher-priced, non-genetically modified ingredients, potentially making food more expensive.

Proposition 38 – Tax to Fund Education and Early Childhood Programs.
The Question:
Should California’s personal income tax rates be increased during 2013-24 to provide funds for public schools, early childhood education programs, and state debt payments?

The Situation:
The personal income tax (PIT) is imposed on individual income, at rates from 1% to 9.3%, higher rates being charged as income increases. An additional 1% tax applies to annual incomes over $1 million (revenue dedicated to mental health services). The PIT revenue—totaling $49.4 billion for the 2010-11 fiscal year—goes into the state’s General Fund.

California provides educational services to about 6 million public school students, served through more than 1,000 local educational agencies. Most school funding is provided through what is commonly called the Proposition 98 minimum guarantee, which totaled $43 billion in 2010-11.

Roughly 70% of this funding goes to school district governing boards, which determine the specific activities to be funded and the distribution among individual schools. The remaining 30% must be used for specific purposes, such as meals or transportation.

Most California children attend some type of early childhood program. While many families pay to participate, public funds also subsidize some children from low-income families. Because state and federal funding is insufficient, waiting lists are common.

The Proposal:
Prop 38 would increase PIT rates until 2024 on all but the lowest income bracket, impacting approximately 60% of filers. The maximum 9.3% PIT rate would be increased in stages up to 11.5% (on incomes of $2,500,000 for single filers, $5,000,000 for joint filers). The additional 1% tax for mental health services would continue to apply.

Prop 38 revenues would be dedicated to three purposes. In 2013-15, 60% of the funds would go to schools, 10% to early childhood programs, and 30% to state debt payments. In 2015-17, a somewhat higher share could be used for state debt payments. After that, up to 85% of the funds would go to schools and up to 15% would go to early childhood programs, with some revenue available for state debt payments.

Fiscal Effects:
Initially, Prop 38 would generate approximately $10 billion annually, and, although likely to fluctuate, this amount would tend to grow in later years. Due to these fluctuations and other uncertainties, the longer-term revenue increases are difficult to estimate.

In the initial years, school districts would receive roughly $6 billion annually, or $1,000 per student, for schools, low- income students, and training, technology, and teaching materials. Early childhood programs would receive roughly $1 billion annually, largely for childcare and preschool.

Until the end of 2016-17, the remaining $3 billion would be used to make payments on the state’s general obligation debts, thus providing savings for other public programs. After that, schools would receive more as the amounts for state debt payments decrease significantly.
Supporters Say:
-Prop 38 makes schools a priority again, guaranteeing funding to restore a well-rounded education.
-School Districts could use the funds in different ways at different schools – expenditures would be determined locally.

Opponents Say:
-Taxpayers would be locked into higher taxes until 2024, with virtually no accountability as to how the money is spent.
-Under Prop 38, there are no requirements to improve school performance or get rid of bad teachers.

Other California Propositions:
– Prop 31: State Budget. State and Local Government.
– Prop 33: Auto Insurance Companies. Prices Based on Driver’s History of Insurance Coverage.
– Prop 34: Death Penalty. Repeal and Replace with Life Imprisonment.
– Prop 35: Human Trafficking. Penalties Expansion.
– Prop 36: Three Strikes Law. Repeat Felony Offenders. Penalties.
– Prop 39: Tax Treatment for Multistate Businesses. Clean Energy and Energy Efficiency Funding.
– Prop 40: Redistricting. State Senate Districts.

To view the full descriptions, including the Pros and Cons of each Proposition, or to find your polling place, please visit http://smartvoter.org.

The General Election will be held on Tuesday, November 6th, 2012. Polls Open from 7am to 8pm. The last day to request a Vote-By-Mail ballot is October 30th.