SACRAMENTO (AP) — The Legislative Analyst's Office on Friday estimated that a compromise tax measure for the November ballot would generate about $2.2 billion less in the first year than estimates from Gov. Jerry Brown's Department of Finance.
The Democratic governor this week reached a deal with supporters of a rival tax plan known as the millionaires tax. The revised initiative would raise the state sales tax by a quarter-cent for five years. It also would raise taxes on a sliding scale from 1 percent to 3 percent on incomes over $250,000 a year for seven years.
A review released Friday by the nonpartisan analyst's office estimates revenue of $6.8 billion in 2012-13, which is $2.2 billion less than Brown's projection. Revenue for the following year would be $5.1 billion, according to the LAO, which would be about $2 billion below the finance department forecast.
The two agencies previously differed in their revenue forecasts for Brown's original initiative, which sought to raise the sales tax by a half-cent and raise income taxes on the wealthy for five years. The difference in the two projections is partly because the governor's finance department estimates higher revenue from capital gains taxes.
Both forecasts include revenue from an expected Facebook initial public offering later this year. The legislative analyst predicts that will bring in about $408 million in 2013-14 from the sale of stock.
Brown forged the compromise with the California Federation of Teachers, the Courage Campaign and other supporters of a higher tax on millionaires this week, after polls showed his measure slipping in public opinion.
The coalition of Democratically aligned interests faces a short time frame to qualify the new initiative in time for November's general election. The secretary of state's office must certify all measures by June 28.
Both sides say their desire for a unified initiative to temporarily raise the state's sales and income taxes ultimately came down to a shared interest to generate more revenue for schools and to help close the state's $9.2 billion deficit. They also wanted to avoid a messy political fight that would have confused and turned off voters.
They still face competition for votes with a separate initiative being promoted by wealthy Los Angeles attorney Molly Munger.
Her proposal would raise income taxes on a sliding scale for nearly all wage-earners to help fund schools. She signaled her commitment to continuing with the initiative by contributing an additional $1.5 million to her campaign on Thursday, a day after Brown and his allies announced their compromise.