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Over the last year California’s budget crisis has resulted in devastating cuts to our public schools, colleges, social services and state infrastructure. While these cuts have been felt most by the state’s poor and working families, ultimately they are affecting the quality of life of all Californians, undermining our state’s long-term economic health for generations to come. Cuts to our education, for example are creating a substandard state public educations system that will significantly weaken California’s long-term economic competitiveness around the world.
Furthermore, as highlighted by the growing Occupy Wall Street movement, the gap between the rich and poor continues to widen, while the lowest income Californians are baring the greatest burden for addressing the state’s growing budget crisis. Meanwhile, large corporations are paying less of a share of the state’s tax burden than they did ten years ago. According to the California Budget Project, the wealthiest 5 percent of Californians now receive 33.6 of California’s income, up from 27.7 percent in 1993, while the lowest 60 percent receive 19.3 percent of California’s income, down from 22.7 percent in 1993. Personal income tax now accounts for 51.5 percent of general fund revenue, up from 35.4 in 1980, while corporate taxes account for 12.4 percent down from 14.6 percent in 1980. Between 2001 and 2009 corporate profits in California nearly tripled, growing by 192 percent, while personal income grew by only 16.5 percent.
The majority of Californians would like large corporations and the wealthy to pay their fair share in order to pay for essential services. Unfortunately, because of California’s “two-thirds law,” which requires a two-thirds majority of the legislature to pass any measure to raise taxes, a small group of legislators (just over one-third) have been able to prevent any increases in revenue for the state, instead insisting on harsh cuts to public services.
A consortium of progressive community and labor advocates, including CAUSE, are now working on several possible ballot proposals for 2012 that would begin to address the ongoing problem. One measure being considered seriously is an initiative to tax the top 1% of income earners (over $500,000 per year) at a 1% higher rate (from 9.3 percent to 10.3 percent), a measure that could potentially raise over $2 billion dollars. Oil severance taxes, ‘pollution taxes,’ alcohol and cigarette taxes and other efforts to close corporate loopholes are also being considered. Some would require large corporations make public their tax expenditures, in order to provide some transparency about loopholes and other tax avoidance schemes employed by corporations that endanger California’s future.
Several proposals to address the undemocratic two-thirds rule on taxes are also being floated, including a measure that would allow for “double majority”, allowing the legislature to place tax increases on the ballot with a simple majority. Releasing localities, like cities and counties, from the two-thirds requirement may also be a solution acceptable to voters.
Whatever ballot measures appear on the ballot in 2012, CAUSE’s Civic Engagement Project will be active, speaking with tens of thousands of voters in our region, and encouraging turnout and participation in the process of a more equitable state. We simply cannot allow the public infrastructure that supports the California Dream to crumble. We will continue to work for true shared prosperity, one voter at a time.