(Photo Credit: Violeta Vaqueiro)
“The decision to include payments into the state’s new rainy day fund in the proposed ballot measure that would extend high income tax rates is a victory for all Californians.
Seventy percent of Californians voted for the Rainy Day Fund in 2014 when they approved Prop 2. It was a good idea then, it remains a good idea now, and will be an even better idea tomorrow when the next recession hits.
Analysis done by California Forward shows that excluding the proposed new revenues from the requirements of Prop 2 would have devastating consequences, reducing reserves in half by the likely time of the next recession and adversely impacting education, health care and other vital services funded by the State.
California Forward has enthusiastically supported Prop 2 from the time it was conceived and will continue to be vigilant to protect Prop 2 from future attacks.
Even without the Prop 2 exclusion, thoughtful deliberation will be required in the months ahead to determine if extension of the income tax provisions of Prop 30 is the right tax policy for California. We encourage Californians to read California Forward’s “Financing the Future” paper which analyzes California’s revenue needs and the pros and cons of different tax policies.