Capitol Alert
By Christopher Cadelago
September 21, 2015

  • Measure expands, makes permanent income tax increases
  • Coalition includes Hospital Association, health workers’ union

A group of health and youth advocates on Monday introduced a ballot initiative to expand and make permanent the Proposition 30 income tax increases on the state’s highest earners.

The proposal, led by the California Hospital Association, the Service Employees International Union-United Healthcare Workers West and Common Sense Kids Action, is the second tax measure aiming for next year’s ballot that would extend the 2012 income tax increase.

Similar to Proposition 30, the latest measure would increase taxes on couples earning at least $580,000 annually. Those taxes were set to expire at the end of 2018. It also would impose even higher income tax rates for so-called “super-earner” couples that make more than $2 million a year.

Half of the estimated $10 billion a year in annual revenues would go to K-14 education; 40 percent to California’s Medi-Cal program for low-income people; and the remainder to prekindergarten and early childhood development programs. And it calls for a “rainy day” budget reserve modeled on last fall’s Proposition 2.

California has more kids living in poverty and greater income inequality than virtually any other state, Jim Steyer of Common Sense Kids Action said in a statement announcing the tax increase. Steyer said the measure asks the wealthiest to “pay a little more so we can make the investments every California kid needs to have a great start in life.”

Money from the Invest in California’s Children Act could go to any number of health care-related programs, including to reimburse physicians and other health care workers, who see Medi-Cal patients or to replace a tax on managed-care organizations that expires June 30.

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