Believe it or not, California’s top income tax rate is scheduled to decrease by three percentage points after 2030 upon the expiration of a temporary tax increase, which started as a seven-year increase passed by voters in 2012 via a ballot measure entitled “Temporary Taxes to Fund Education” and was extended to 2030 by a subsequent ballot measure. Both measures were backed by public sector unions whose members garner the lion’s share of school and other spending funded by income taxes. The measures have extracted billions more from taxpayers but you wouldn’t know it from student performance or parental satisfaction. Still, you can be sure public sector unions are already gearing up to extend, if not lift, the higher income tax rate beyond 2030. Aiding and abetting their effort is Governor Newsom’s dangerous budget proposal to drain money from the Rainy Day Fund. Earlier this week we issued a statement to legislators explaining that danger and encouraging them to replenish the Rainy Day Fund, but we’re not optimistic they will challenge the governor. This is another reason why CA must elect a reform-oriented governor in 2026.
Speaking of reform, some members of the GFC Network in San Francisco have asked us how to best help that city’s new mayor, Daniel Lurie. From my own experience, a reform-oriented chief executive needs political and financial support of legislators who are willing to back the new executive’s reform agenda. That’s because reform proposals antagonize vested special interests who put pressure on legislators to reject the reforms. In San Francisco, this form of help would translate into providing political and financial support to members of the Board of Supervisors who are willing to back Mr. Lurie’s reform agenda.
