# Prop 3: Makes the 2012 high-income tax permanent

URL: https://www.californiapeople.org/props/prop-3

- number: 3
- title: Makes the 2012 high-income tax permanent
- type: Initiative constitutional amendment
- sponsor: California Teachers Association

**Our read: Toss-up: weigh it carefully.** Makes the “temporary” top-earner tax permanent: $9–10B a year. School spending is up 75%, results are flat, and no money is tied to outcomes.

## Key findings
- The "temporary" top-earner tax has raised **more than $104B since 2012**, currently **$9–10B a year**. [^1]
- It was sold as temporary twice: 7 years in 2012 (Prop 30), then extended 12 years in 2016 (Prop 55). **This measure removes the end date** (now after 2030). [^2]
- School spending per student is **up 75% after inflation** since 2012–13. But **fewer than half of 4th graders meet state reading standards, and 37% meet math**, and scores haven't recovered from the pandemic. [^3]
- Only **about 40%** of the money goes to schools and community colleges under the state's minimum-funding rule (Prop 98). The rest frees up the general budget. [^2]
- The sponsor is the teachers' union, whose members' pay comes from this money: **$53.8M** of the $74.8M raised by the main Yes committees. The opposition has raised $5,500. [^4][^5]

## Track record
| Period | Measure | What it did | Promise |
|---|---|---|---|
| 2013–2018 | Prop 30 (2012) | Raised rates on top earners through 2018 and added a ¼-cent sales tax, which Prop 55 did not renew [^6] | Temporary, to stop recession-era school cuts |
| 2019–2030 | Prop 55 (2016) | Extended the income-tax part for 12 years | Temporary extension |
| 2031+ | **Prop 3** | Same rates, permanent | No more renewal votes |
| Total so far | | **$104B+ raised; $9–10B/yr recently** [^1] | |

Outcomes since 2012: per-pupil spending rose from below the national average to 16th in the nation. Adjusted for labor costs, it ranks 31st. [^3]

## What it does
- Keeps rates of 10.3% on income over ~$360K up to 12.3% over ~$721K. [^7]
- Paid by about the top 2% of filers, who already pay about half of all state income tax. [^2]

## Money and conflicts
- **Yes $81.1M** (Ballotpedia's count of the main committees is $74.8M). **No $5,500 (CalTax).** [^5][^4]
- CTA opposes Prop 40, the other "tax the rich" measure. [^8]

## Does it solve a lasting problem?
- It prevents a $5–15B budget cliff, but it locks in the state's dependence on volatile capital-gains income, the main reason California's budget swings so much. Spending is up sharply while results are flat, and the measure ties no money to outcomes.

## If you vote yes: accountability
**Bottom line:** The money is already flowing, about $9–10B a year, and it will keep flowing with no end date and no link to student results. [^1] The real accountability tools are local: your school board decides how its share is spent, in public.

### The rules this money already carries
The 2012 tax created an **Education Protection Account (EPA)**. Each school district and community college gets a share. Under the state Constitution, each district must:
- decide how to spend it **in an open session of a public board meeting**
- **not spend it on administrators' salaries or benefits**, or any other administrative cost
- **post on its website** how much it received and how it spent it
- have its annual **independent audit check** that the money was spent properly
[^9]

### Who's accountable
- **Your school board and community college board.** They vote on the EPA spending plan every year, usually in June with the budget.
- **The State Superintendent of Public Instruction**, who runs the Department of Education. That race (Barrera vs. Shaw) is on this ballot.
- **The Legislature and Governor**, who decide how much of the rest of the budget goes to schools. Only about 40% of this tax ends up as new school money. [^2]

### Who to press, and what to ask for
- At your district's June budget meeting, ask: **how did the EPA money change reading and math results?** Fewer than half of 4th graders meet reading standards, and 37% meet math. [^3]
- Ask your legislators to tie future increases to published results, such as reading and math by school and per-student spending by school.

### Public records to request (CPRA)
Anyone can file a California Public Records Act request (the state's version of FOIA), with no reason required. Agencies must respond within 10 days, or 24 in unusual cases. [^10]

> **To your school district:** Under the California Public Records Act (Gov. Code § 7920.000 et seq.), I request the district's Education Protection Account spending plans and year-end accountings for 2020–21 through 2025–26, the board resolutions adopting them, and the sections of the annual independent audit that test EPA spending.

## Both sides
- **For:** CTA, school employees, PTA, CA Democratic Party, CMA. Without it, they say, schools face billions in cuts, including teacher layoffs. [^5]
- **Against:** CalTax, Reform California, OC Register, SD Union-Tribune. California already has the highest income taxes of all 50 states, and voters were promised this was temporary. [^5]

## Official voter guide (condensed) with annotations
- Official title: Provides Permanent Funding for Schools and Health Care by Extending Existing Tax on High Incomes. Initiative Constitutional Amendment.
- Summary: Makes permanent the existing voter-approved tax rates on individuals earning over "$371,000 (adjusted annually for inflation)." Revenue goes to public education.
- Fiscal impact: Keeps $5 billion to $15 billion a year in state income tax revenue that would otherwise expire in 2031.
- A YES vote means: An income tax increase on high-income earners in place since 2012 would become permanent instead of expiring in 2031.
- A NO vote means: An income tax increase on high-income earners in place since 2012 would expire in 2031.
- Argument for: Protects school and health care funding without raising taxes; prevents a tax cut for the wealthiest by keeping rates the top 2% have paid for 15 years; requires audits so money reaches classrooms.
- Argument against: Californians already pay some of the highest taxes in the country with a high cost of living; the state wastes billions on failed programs and should fix spending before making taxes permanent.
- Supporters: California Teachers Association, CA School Nurses Organization, California State PTA, Planned Parenthood Affiliates of CA
- Opponents: California Taxpayers Association, Family Business Association of CA, CA Hispanic Chambers of Commerce

Annotations (what the booklet leaves out):
- (pro) "Without raising taxes" is accurate today, but these rates were sold as temporary twice, in 2012 (Prop 30) and 2016 (Prop 55). This makes them permanent. [^2]
- (summary) "Revenue goes to public education" overstates it. Because of the Prop 98 school-funding formula, the Legislative Analyst estimates only about 40% ends up as new school money; the rest frees up funds elsewhere. [^2][^7]
- (general) Placed on the ballot by the California Teachers Association, whose members benefit. Yes side raised $81.1M (CTA alone $53.8M). The No side raised $5,500. [^5][^4]

## Sources
[^1]: California Budget & Policy Center (Apr 2026). https://calbudgetcenter.org/resources/how-a-tax-on-wealthy-households-funds-schools-health-care-more/
[^2]: LAO. https://lao.ca.gov/ballot/2026/prop3-110326.pdf
[^3]: PPIC, what the next governor needs to know (July 1, 2026). https://www.ppic.org/blog/what-californias-next-governor-needs-to-know-about-pk-12-education/
[^4]: Ballotpedia News (Oct 26, 2026). https://news.ballotpedia.org/2026/10/26/with-798-9-million-in-contributions-and-counting-2026-is-the-most-expensive-ballot-measure-election-cycle-in-california/
[^5]: Official Voter Guide arguments. https://vig.cdn.sos.ca.gov/2026/general/pdf/prop3-arg-rebuttals.pdf
[^6]: EdSource on Prop 55 (2016). https://edsource.org/2016/prop-55-initiative-to-extend-income-tax-increases-to-benefit-schools/570475
[^7]: CalMatters guide. https://calmatters.org/california-voter-guide-2026/proposition-3-high-income-tax/
[^8]: CalMatters Prop 40 guide (CTA position). https://calmatters.org/california-voter-guide-2026/proposition-40-billionaire-tax/
[^9]: Berkeley Unified EPA resolution (2014), quoting Art. XIII § 36. https://www.berkeleyschools.net/wp-content/uploads/2014/05/EPA_Board_Resolution_05-27-14.pdf
[^10]: First Amendment Coalition, CPRA deadlines. https://firstamendmentcoalition.org/resources/explainers/explainer-cpra-delays
[^11]: CA SoS contributions. https://www.sos.ca.gov/campaign-lobbying/helpful-resources/measure-contributions/2026-ballot-measure-contribution-totals/proposition-3-provides-permanent-funding-schools-and-healthcare-extending-existing-tax-high-incomes-initiative-constitutional-am