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After weeks of negotiating behind the scenes, Governor Brown and the California Federation of Teachers announced that they have reached a compromise on a November tax initiative.
"This united effort makes victory more likely and will go a long way toward balancing our budget and protecting our schools, universities and public safety," said Brown in a prepared statement this past Wednesday.
The deal would result in a smaller sales tax hike and larger tax increase on the wealthy than the Governor wanted. CFT had been circulating an initiative with no sales tax hike and a two-step increase on earners starting at $1 million.
More specifically, the new deal would:
A deal between the two parties might look good on paper. However, cutting a deal so late in the signature-gathering season ramps up the pressure on proponents -- and more importantly, ramps up the costs. Sources say the new initiative would be filed in the next couple of days. The Legislative Analyst’s Office would then has 45 days to return an analysis to state Attorney General Kamala Harris, who then must write ballot language for petitions.
Should the initiative gets fast-tracked, it would be eligible for signature gathering in early April. Proponents think they may have four to five weeks to collect a million-plus signatures, a compressed period that would most certainly raise the cost per signature.
According to the Sacramento Bee, there are some key points that should be raised for budget watchers:
Brown plans to continue collecting signatures for his current initiative as a back-up measure, sources said.
It's not clear where the business community will land. For weeks, Brown has touted his lack of opposition from big business groups, a fact confirmed recently when the California Chamber of Commerce and California Business Roundtable opposed the CFT plan and another rival measure by wealthy attorney Molly Munger. But in their opposition, business groups made clear they opposed the other measures because they were either "permanent" or "virtually permanent." Brown's income tax hike extends by two more years in a nod to CFT, but that would be less palatable to business groups who took issue with the time length of the other initiatives.
As always, stay tuned…