The well-funded campaign for California’s Proposition 3 relies heavily on public schools to make its case to voters, featuring video advertisements warning of larger class sizes and teacher layoffs if the measure fails. Yet despite the prominent messaging centering on classrooms, the ballot initiative is fundamentally a broader tax measure on high-income earners designed to support general state services across the board, including healthcare, courts, and the prison system.
Under Proposition 3, higher income tax rates on approximately the top 2% of California tax filers—rates originally enacted temporarily in 2012 to address a budget deficit and later extended through 2030 by Proposition 55 in 2016—would be made permanent. If these rates are allowed to expire, the state general fund would absorb an estimated annual revenue loss between $5 billion and $15 billion in today’s dollars.
Financial allocations from the tax revenue reflect a split distribution: roughly 40% goes toward funds supporting transitional kindergarten through community college, while the remaining 60% flows into healthcare, in-home supportive services, higher education, corrections, and judicial systems. This broad budgetary footprint has united a diverse coalition of labor organizations behind the Yes on Proposition 3 campaign, even as the public-facing campaign concentrates heavily on education.
Among the measure’s principal backers is the California Teachers Association, which contributed approximately $60 million to promote the initiative through Monday while mobilizing its membership for extensive on-the-ground canvassing. CTA President David Goldberg described Proposition 3 as an essential foundation for long-term educational stability, noting that without permanent revenue, districts could face severe personnel contractions by the end of the decade, potentially affecting up to one in six educators.
Additional heavy financial backing has poured in from organizations such as the National Education Association, the California School Employees Association, CFT, the California arm of the Service Employees International Union, and SEIU Local 2015, which represents in-home care providers and nursing home staff. In total, support committees have amassed more than $81 million, contrasted with roughly $5,500 in organized opposition spending.
The political landscape surrounding the measure has created unusual alignments, particularly in relation to Proposition 40, a separate billionaire tax measure also on the ballot. While Proposition 40 would levy a one-time 5% tax on certain assets of California billionaires to generate tens of billions of dollars mostly for healthcare—partly as a response to federal health and social service funding cuts under legislation passed in July 2025—it has drawn intense opposition and divided likely voters. Opponents of the billionaire tax have waged a massive campaign totaling $130 million, largely funded by tech billionaires through the committee Building a Better California.
Significantly, Building a Better California has endorsed Proposition 3. Because Proposition 3 preserves income tax rates that high earners already pay rather than reducing their overall net worth, billionaire-funded groups and prominent tech figures such as Google co-founder Sergey Brin—who gave $102 million to stop Proposition 40—have raised no objections to Prop 3. Union leadership also viewed Proposition 3 as a more strategic, durable bet for education funding compared to the divisive and structurally distinct Proposition 40, fearing that two concurrent tax-the-rich initiatives could overwhelm voters and prompt a blanket rejection of revenue measures.
Broader endorsements for Proposition 3 span a wide political spectrum, including the California Medical Association, California Professional Firefighters, United Domestic Workers, Governor Gavin Newsom, and gubernatorial front-runner Xavier Becerra. Meanwhile, other powerful organizations such as the California Democratic Party, California Labor Federation, and the California Nurses Association have chosen to support both propositions.
Opponents of Proposition 3, including the California Republican Party, the Libertarian Party, and the Howard Jarvis Taxpayers Association, argue that voters were originally promised the higher tax brackets would expire in 2018. Critics contend that extending the taxes permanently breaks previous commitments to taxpayers.
If Proposition 3 fails, the state’s highest individual income tax rate would revert from 12.3% down to 9.3% in 2031, though an unrelated 1% surcharge on taxable income exceeding $1 million for mental health services would remain active. The income thresholds for these top tax brackets have been adjusted upward over time for inflation, with the current 10.3% rate applying to individual taxable incomes between $371,479 and $445,771, and the top 12.3% bracket applying to single filers with taxable income above $742,953.
