Since you’re reading this post, you obviously passed the test we posted on Friday to avert being knocked off the Internet.

Three tax measures have qualified for the November ballot, sponsored by Governor Jerry Brown, multimillionaire heiress attorney Molly Munger, and billionaire businessman Tom Steyer, respectively.

Ballot Measure Proponents Jerry Brown, Molly Munger, and Tom Steyer

Munger Sues State

The battle between Munger and Brown on ballot measure numbering has a hearing scheduled today at 9:00 AM. (Munger asked the court to delay the hearing for another nine days, stating the Los Angeles County Registrar of Voters had refused to supply documents or completely answered questions, but was apparently unsuccessful in getting the delay.)  For more details on the suit, read my post from last Monday (note that on Thursday, the Legislature approved legislation moving the water bond from the 2012 ballot to the 2014 ballot; the water bond would have been Proposition 30 regardless of Munger’s lawsuit, so when reading that post, just remove Proposition 30 and subtract one from the numbering of all the other measures; other than that, everything in the post is still current information).

If Munger prevails, her ballot measure will be Proposition 36 rather than Proposition 38, Brown’s ballot measure will be Proposition 37 rather than Proposition 30, and Steyer’s will be Proposition 38 rather than Proposition 39.  In other words, if Munger prevails, the ballot order will be six other measures, the Munger measure, the Brown measure, the Steyer measure, and two other measures.  If Brown prevails, the ballot order will be the Brown measure, seven other measures, the Munger measure, the Steyer measure, and the Senate redistricting referendum.

Brown’s Income and Sales Tax Increase Measure Leads, But is Threatened by High-Speed Rail

The latest Field Poll finds Governor Jerry Brown’s income and sales tax increase ballot measure leads 54%-38%, with 8% undecided.  (The poll found a similar result in May, with the measure leading 52%-35%, with 13% undecided.)   Brown’s tax increase ballot measure leads among every demographic and geographic group, as well as liberals, moderates, Democrats, and independents.  Only conservatives and Republicans oppose the measure.  However, not all is rosy for the Brown tax increase measure…

21% of the measure’s supporters indicated that they would be less inclined to support the Brown tax increase if the high-speed rail funding bill was approved.  Conversely, only 5% of the measure’s opponents indicated that they would be more inclined to support the Brown tax increase if the high-speed rail funding bill was approved.

(The poll was completed shortly before the Senate passed the high-speed rail funding bill 21-16 on Friday and the Assembly passed the bill 51-27 on Thursday.  Brown is expected to sign the bill this week.)

The high-speed rail bill’s approval may very well endanger Brown’s tax increase initiative.  Ballot measures typically lose support as campaigns wear on, and the high-speed rail may send support for Brown’s tax increase measure under 50%, making it that much more difficult to pass once the campaign season begins in the fall.

Voters Evenly Split on Munger Income Tax Increase Measure

Molly Munger’s income tax increase ballot measure has voters perfectly split, with 46% supporting it and 46% opposing it.

Republicans oppose the Munger income tax increase, Democrats support it, and independents are evenly split.  Conservatives and moderates oppose it while liberals support it.  Men oppose it while women support it.  Whites oppose it, Latinos support it, and other ethnic groups were split.

Voters under 40 support the Munger income tax increase measure while voters over 40 oppose it.  Union households support it while non-union households were split.  People making less than $40,000 support it while voters making more than $40,000 oppose it.

As expected, San Francisco Bay Area voters support the Munger income tax increase measure while other Northern Californians oppose it.  Strangely, Los Angeles County voters are evenly split on the measure while other Southern Californians were supportive, upending the typical result of LA County being less tax-averse than other Southern Californians (in this same poll, on the Brown and Steyer measures, the more-expected result of LA County being less tax averse than the rest of Southern California occurred).

Voters Evenly Split on Steyer Singles Sales Factor for Business Income Tax Calculation Measure

Tom Steyer’s measure requiring the singles sales factor for business income tax calculation has voters effectively split, with 44% supporting it and 43% opposing it.

Conservatives and Republicans oppose the Steyer single sales factor measure while independents, moderates, Democrats, and liberals support it.  While both genders were split within the margin of error, men were more likely to oppose while women were more likely to support.  Whites oppose the measure, Latinos support it, and other ethnic groups were evenly split.

Voters under 40 support the Steyer singles sales factor measure, voters over 65 oppose it, while middle-aged voters were even split.  Union households were supportive while non-union households were evenly split.  Voters making making $40,000-$99,999 support the measure while those making more than $100,000 oppose the measure.  Oddly, those making less than $40,000 were evenly split.

The San Francisco Bay Area and Los Angeles County support the Steyer single sales factor measure while the rest of Northern and Southern California oppose it.

Will the LA County Measure R Sales Tax Extension Accidentally Kill All the Tax Measures?

In 2008, LA County voters approved Measure R, a 0.5% sales tax increase to fund transportation projects that took effect July 1, 2009, and expires 30 years later in 2039.  Inexplicably, the LA Metropolitan Transportation Authority voted to place an extension of Measure R on the November 2012 ballot to add 30 years to the 0.5% sales tax increase making it expire in 2069.

Just four years into a thirty-year tax, voters are being asked to make it a sixty-year tax.  If approved, nearly all people who vote on this ballot measure will be dead by the time the tax expires.

It seems strategically odd to ask for an extension so soon after the initial passage.  It would have seemed more strategically sound to wait until 2030 or so when Measure R was nearing expiration.

The placement of the Measure R extension on the November ballot means LA County voters will be faced with four tax measures on their ballot.  Voter tax fatigue will take its toll in LA County.

Why does LA County tax fatigue matter to the rest of the state?  Well, 1/4 of all Californians live in Los Angeles County.

Look at Prop 29: it failed by 0.6%.  The San Francisco Bay Area went overwhelmingly for it.  Most of Northern and Southern California went overwhelmingly against it.  Los Angeles County narrowly went against Prop 29.

This Measure R extension may be the inadvertent death knell of the tax-related statewide ballot measures in November.

LA County support is pivotal for any tax measure hoping to pass in California.

What the Three State Ballot Measures Would Do

For those of you who are wondering what the three state ballot measures would do…

Brown’s measure (likely Proposition 30 or Proposition 37, it is officially titled, “Temporary Taxes to Fund Education. Guaranteed Local Public Safety Funding. Initiative Constitutional Amendment. “) would increase personal income taxes for amounts above $250,000 per year for seven years and raise the state sales tax by 0.25% for four years. Specifically, income taxes on amounts:

• between $250,000-$300,000 would increase by 1% to 10.3%
• between $300,000-$500,000 would increase by 2% to 11.3%
• above $500,000 would increase by 3% to 12.3%

Sales taxes in OC would climb to 8%, except in La Habra, where it would go to 8.5%. LA County sales tax would go up to 9%.

For seven years, 89% of the tax money is allocated to K-12 schools with 11% to community colleges. On a permanent basis, 1.0625% sales tax would be permanently removed from the Prop 98 education funding formula to fund local public safety realignment programs.

Click here for the Legislative Analyst Office’s official fiscal analysis of the Brown measure.

Munger’s measure (likely Proposition 36 or Proposition 38, it is officially titled, “Tax for Education and Early Childhood Programs. Initiative Statute.”) would increase personal income taxes on nearly all Californians for twelve years.  Specifically, for individuals who are not heads of households, income taxes on amounts:

• between $7,316-$17,346 would increase by 0.4% to 2.4%
• between $17,346-$27,377 would increase by 0.7% to 4.7%
• between $27,377-$38,004 would increase by 1.1% to 7.1%
• between $38,004-$48,029 would increase by 1.4% to 9.4%
• between $48,029-$100,000 would increase by 1.6% to 10.9%
• between $100,000-$250,000 would increase by 1.8% to 11.1%
• between $250,000-$500,000 would increase by 1.9% to 11.2%
• between $500,000-$1,000,000 would increase by 2.0% to 11.3%
• between $1,000,000-$2,500,000 would increase by 2.1% to 11.4%
• above $2,500,000 would increase by 2.2% to 11.5%

For heads of households, income taxes on amounts:

• between $14,642-$34,692 would increase by 0.4% to 2.4%
• between $34,692-$44,721 would increase by 0.7% to 4.7%
• between $44,721-$55,348 would increase by 1.1% to 7.1%
• between $55,348-$65,376 would increase by 1.4% to 9.4%
• between $65,376-$136,118 would increase by 1.6% to 10.9%
• between $136,118-$340,294 would increase by 1.8% to 11.1%
• between $340,294-$680,589 would increase by 1.9% to 11.2%
• between $680,589-$1,361,178 would increase by 2.0% to 11.3%
• between $1,361,178-$3,402,944 would increase by 2.1% to 11.4%
• over $3,402,944 would increase by 2.2% to 11.5%

For the first four years, 60% of the tax money is allocated to K-12 schools, 10% to early childhood programs, and 30% to repaying state debt. For the remaining eight years, 85% of the tax money is allocated to K-12 schools and 15% to early childhood programs.

Click here for the Legislative Analyst Office’s official fiscal analysis of the Munger measure.

Steyer’s measure (likely Proposition 38 or Proposition 39, it is officially titled, “Tax Treatment for Multistate Businesses. Clean Energy and Energy Efficiency Funding. Initiative Statute.”) would permanently impose the single sales factor calculation on income taxes for multistate businesses.

For five years, $550,000,000 would be allocated from the state General Fund into the “Clean Energy Job Creation Fund,” which would be used for energy efficiency retrofits and alternative energy installations in government buildings, local government energy retrofit financial assistance programs, and job training and workforce development programs.

Click here for the Legislative Analyst Office’s official fiscal analysis of the Steyer measure.