California voters will decide in November 2026 whether to permanently extend a state income tax increase on high earners that was originally approved as a temporary measure in 2012, under Proposition 3 on this year’s statewide ballot.
The tax increase traces back to a 2012 ballot initiative that raised state income tax rates for seven years on single filers earning $250,000 or more annually and couples earning $500,000 or more. Revenue from that increase was directed to local school districts and community colleges. The same 2012 measure also temporarily raised California’s sales tax from 7.25 percent to 7.5 percent for four years; that sales tax increase has since expired, and the rate has returned to 7.25 percent statewide, though counties and cities can levy additional local sales taxes.
In 2016, voters extended the income tax increase from its original seven-year span to 12 years. Proposition 3 would remove the expiration date entirely, making the higher income tax brackets permanent.
Who Would Be Affected
The income thresholds are adjusted for inflation. At 2025 levels, the higher rates would apply to single filers earning $371,000 or more, couples earning $742,000 or more, and heads of household earning $505,000 or more.
Under Proposition 3, 89 percent of the resulting tax revenue would go to local K-12 school districts, with the remainder allocated to community colleges. Local school boards would decide how to spend the funds, with the restriction that none of the money could be used for administrative costs. California’s nonpartisan Legislative Analyst’s Office estimates the measure would generate between $5 billion and $15 billion annually.
Enrollment Trends
California’s public school enrollment has been declining. State figures show 5,731,260 students currently enrolled, a seven percent drop from a decade ago, including a 1.3 percent decline in the past year alone.
Proposition 3 is one of 14 measures on California’s November 2026 statewide ballot.
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