The California Chamber of Commerce Board of Directors recently took positions on the following two initiatives proposed for the November 2016 ballot:
Oppose Prop. 30 Tax Extension
The CalChamber Board voted on May 18 to oppose a proposed ballot initiative that would extend Proposition 30 income tax hikes until 2031. (8/11/16 update: The initiative will appear on the ballot as Proposition 55.)
CalChamber did not oppose the original Proposition 30 tax increase because the measure was supposed to be temporary and the state was in the midst of a dire financial situation.
An extension of Proposition 30 would make the tax virtually permanent, even when the state’s budget is balanced. In voting to oppose the proposed tax extension, the Board noted that the state currently has in excess of $3 billion in reserves and the Governor has proposed a balanced budget that pays down debt and saves even more for future economic downturns.
Also, revenue from the personal income tax is highly volatile and any anticipated revenue from this initiative might be significantly reduced when California is faced with future recessions.
Passing an extension now is premature, according to the CalChamber Board, because Proposition 30 taxes do not expire for another two-and-a-half years.
Oppose Hospital Compensation Act
The CalChamber Board also voted to oppose the Hospital Compensation Act of 2016, a proposed ballot initiative that would impose a cap on total annual compensation paid to private nonprofit and for-profit hospital executives at the level of compensation received by the President of the United States—currently $450,000.
In voting to oppose the measure, the CalChamber Board noted that the proposal would put California’s health care system at risk for not being able to recruit top talent in a competitive environment, especially because California has a higher-than-average cost of living.