Your guide to Proposition 3: Making a high-income tax extension permanent

Proposition 3 would make an expiring state income tax on high earners permanent, which supporters say is critical to funding schools and healthcare.

California

Voter guide to the 2026 California general election

California’s general election takes place on Novemer 3. Learn about L.A.’s city and county races as well races for state office.

Oct. 1, 2026

Proposition 3 stems from a decision voters made in 2012, amid a budget crisis, to temporary increase the income tax rate on the top 2% of California earners. In 2016, voters approved another extension through 2030.

Proposition 3 would make the additional levy permanent.

If passed, tax rates for the top 2% of earners would remain as they are. Income brackets rise with inflation, but last year the top 2% of taxpayers earned at least $371,000 for single filers and $743,000 for joint filers.

If rejected, tax rates for the top 2% would fall in 2031 from at least 10.3% to 9.3%.

Fundraising data will be updated regularly until the election.

Money generated by Proposition 3, like the current tax, would flow to education, with 89% going to K-12 schools and 11% to community colleges.

Then, because the state constitution requires minimum levels of spending on education, more dollars are freed up to pay for services including healthcare and the University of California and California State University systems, said Kayla Kitson, a senior analyst with the California Budget and Policy Center.

Proposition 3, like the current high-earners tax, has the added effect of raising the minimum levels of funding required to flow to K-12 schools and community colleges, because of the complicated formulas California uses to set its budget, Kitson said.

If Proposition 3 fails, the state could expect to lose between $5 billion and $15 billion annually in tax revenue starting in 2031, according to estimates from the Legislative Analyst’s Office.

Supporters of the measure include the California Teachers Assn., the California School Nurses Organization, the California State PTA and Planned Parenthood Affiliates of California.

The California Teachers Assn., whose members gathered signatures to put Proposition 3 on the ballot, says if voters reject the measure, public schools could face a 15% budget cut, with 1 in 6 educators at risk of losing their jobs.

“Prop. 3 keeps the wealthiest Californians paying their share so our public schools get the funding our students deserve,” the union says on its website.

The California Taxpayers Assn., the Family Business Assn. of California and the California Hispanic Chambers of Commerce have come out against the measure.

Opponents say the state already has the nation’s highest income, sales and gas taxes and Sacramento needs to stop wasteful spending, rather than make taxes that were supposed to be temporary permanent.

“Californians shouldn’t have to bail out politicians and special interests’ mismanagement,” an opposition website sponsored by the California Taxpayers Assn. says. “Waste, fraud and overspending by the state government is not an excuse to raise our taxes even higher.”