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A new Budget Center Issue Brief examines Proposition 55, which will appear on the November 8, 2016 statewide ballot. Prop. 55 would extend — through 2030 — the income tax rate increases on the wealthiest Californians, which were created by Prop. 30 of 2012. Prop. 55 also would create a formula to direct additional funding to Medi-Cal, which provides health care for low-income Californians.

This new brief shows that Prop. 55 is projected to raise $4 billion to $9 billion per year, with these dollars going to K-12 public schools, community colleges, the state’s rainy day fund, and state debt payments, as well as to Medi-Cal and other state services. The Budget Center’s analysis also shows who the Prop. 55 income tax rates would affect: The top 1 percent of households would pay 98.6 percent of the total dollar amount raised by Prop. 55, with the remaining 1.4 percent paid by the next 4 percent of households (see chart). The report also discusses the implications of voters rejecting Prop. 55, which include a multi-billion dollar loss of state revenues annually and, in turn, a drop in funding for K-12 schools and community colleges and a significant budget deficit that would likely result in cuts to other state services.


The Issue Brief describes what Prop. 55 would do, examines its impact on the state budget and on funding for education and other public services, and discusses the policy issues raised by the measure. The California Budget & Policy Center neither supports nor opposes Prop. 55.

— Steven Bliss

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