Income Tax: Proposition 63 a Decade On

California’s Little Hoover Commission has just released a report laying out prescriptions for delivering on the promises made to voters with Proposition 63. The 2004 ballot measure was approved by 53 percent of the voters and enacted a permanent 1 percent surtax on high income earners to provide mental health services. The report begins:

In this review, the Commission learned that funding provided by Proposition 63 – now more than $1 billion annually and representing about 25 percent of California’s overall mental health spending – continues to evade effective evaluation due to antiquated state technology and overlapping and sometimes unaccountable bureaucracies.

The report also mentions California’s historical resistance to tax increases at the ballot box:

Rarely do voters directly increase income taxes, however. Since 1990, they have done it only twice. 2 The Commission decided to examine one of those votes, in which a majority of California’s voters targeted a minority of the population – wealthy millionaires – for an income tax hike. A permanent 1 percent surtax on the state’s highest incomes has since steered approximately $13.2 billion primarily to caring for the severely mentally ill.

View a summary on the report here and view the full version here.

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