PROP 24 REPEALS RECENT LEGISLATION THAT WOULD ALLOW BUSINESSES TO LOWER THEIR TAX LIABILITY. INITIATIVE STATUTE.

Fiscal Impact: Increased state revenues of about $1.3 billion each year by 2012–13 from higher taxes paid by some businesses. Smaller increases in 2010–11 and 2011–12.

WHAT YOUR VOTE MEANS

YES vote on this measure means: Three business tax provisions will return to what they were before 2008 and 2009 law changes. As a result: (1) a business will be less able to deduct losses in one year against income in other years, (2) a multistate business will have its California income determined by a calculation using three factors, and (3) a business will not be able to share tax credits with related businesses.

NO vote on this measure means: Three business tax provisions that were recently changed will not be affected. As a result of maintaining current law: (1) a business will be able to deduct losses in one year against income in more situations, (2) most multistate businesses could choose to have their California income determined based only on a single sales factor, and (3) a business will be able to share its tax credits with related businesses.

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PROP 26 REQUIRES THAT CERTAIN STATE AND LOCAL FEES BE APPROVED BY TWO-THIRDS VOTE. FEES INCLUDE THOSE THAT ADDRESS ADVERSE IMPACTS ON SOCIETY OR THE E

Fiscal Impact: Depending on decisions by governing bodies and voters, decreased state and local government revenues and spending (up to billions of dollars annually). Increased transportation spending and state General Fund costs ($1 billion annually).

WHAT YOUR VOTE MEANS

YES vote on this measure means: The definition of taxes would be broadened to include many payments currently considered to be fees or charges. As a result, more state and local proposals to increase revenues would require approval by two-thirds of each house of the Legislature or by local voters.

NO vote on this measure means: Current constitutional requirements regarding fees and taxes would not be changed.

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Proposition 91: Transportation Funds. FAILED

INITIATIVE CONSTITUTIONAL AMENDMENT.

• Prohibits certain motor vehicle fuel sales and use taxes, that are earmarked for the Transportation Investment Fund, from being retained in the General Fund. Currently such taxes may be retained if Governor issues a proclamation, a special statute is enacted by a 2/3 vote of the Legislature, repayment occurs within three years, and certain other conditions are met.
• Requires repayment by 6/30/17 of such vehicle fuel taxes retained in General Fund from 7/1/03 to 6/30/08. Currently repayment is generally required by 6/30/16.
• Changes how and when General Fund borrowing of certain transportation funds is allowed.

SUMMARY OF LEGISLATIVE ANALYST'S ESTIMATE OF NET STATE AND LOCAL GOVERNMENT FISCAL IMPACT:

• Increases stability of state funding for highways, streets, and roads and may decrease stability of state funding for public transit. May reduce stability of certain local funds for public transit.

TEXT OF PROPOSED LAW HERE.

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