Should California voters approve Proposition 3? (November 3, 2026 ballot)

What's this about?

People disagree about whether California should make its higher income tax rates last forever.

Proposition 3 would keep more money for schools and other state services.

What supporters say

• Proposition 3 could keep $5 billion to $15 billion each year for schools, services, and savings.
• Only about the richest 2% of taxpayers would pay the higher tax rates.
• Studies do not show that high taxes alone cause many rich people to leave California.
• Steady school money can help some students graduate and earn more later.

What critics say

• The tax money could change a lot each year because rich people’s earnings can change sharply.
• More school money does not always lead to better schools or student results.
• Some rich people may change when they earn money, hide less income, or move away.
• Proposition 3 would make this tax plan hard to change in the future.

How to read this

The number of points on each side does not show who is right; stronger proof matters more.

California voters will decide whether to make the state’s higher income-tax rates permanent through Proposition 3 on Nov. 3, 2026. The measure would protect funding for schools and other public services, but it would also lock in a tax policy tied to an unusually unpredictable source of revenue.

The case for

The strongest argument for Proposition 3 is that it would preserve a large existing source of public funding rather than allowing the higher rates to expire. The official fiscal analysis estimates that the measure would raise between $5 billion and $15 billion a year. About 40% would go to schools and community colleges, with the rest supporting other programs and reserves. That could reduce pressure for future cuts or new taxes, although the wide range shows that the money would not arrive in a fixed amount each year. 1

Research on school-finance reforms also suggests that sustained, targeted increases in education spending can improve graduation rates and later economic outcomes, particularly for children from lower-income families. California studies have found better results for some disadvantaged students after targeted funding changes. But those findings show only that funding can help; they do not prove that Proposition 3’s particular formula would produce the same gains. 2

The measure would keep the tax burden narrowly focused. The Legislative Analyst says the higher rates would apply to roughly the top 2% of taxpayers, who currently pay about half of California’s state income taxes. Rates for other taxpayers would not change. 3

There is also limited evidence that high taxes alone would trigger a large taxpayer exodus. Studies find that wealthy Californians do adjust reported income, the timing of earnings and sometimes their residence. But broader research concludes that taxes usually have only a small effect on interstate moves compared with jobs, housing, family and other considerations. That weakens, though does not eliminate, the argument that the tax would drive away enough residents to destroy its fiscal benefits. 4

The case against

The most serious objection is that Proposition 3 would make a highly unstable revenue source permanent. California’s personal-income-tax receipts, especially those tied to high earners and capital gains, can swing sharply with financial markets. The estimated $5 billion-to-$15 billion annual range reflects that uncertainty. Reserves could soften downturns, but they cannot remove the risk that permanent service commitments will outlast favorable economic conditions. 5

High earners may also reduce the amount the state collects by changing how they report income, when they realize gains, which deductions they claim or where they live. California research directly finds responses to differences in state tax rates, although it does not show that these reactions would erase the entire projected gain. The ultimate revenue effect also depends on economic conditions and the assumptions used in forecasting. 6

Proposition 3 would create a constitutional tradeoff between continuity and flexibility. Its permanent rates, specified funding allocations, limits on administrative spending and audit requirements would protect the revenue stream, but they would also make it harder for future lawmakers and voters to redesign the policy as conditions change. 7

Finally, more money does not automatically produce better schools or public services. Research finds average benefits from additional education funding, but California’s results depend heavily on targeting and implementation. Proposition 3 does not guarantee specific achievement gains or ensure that every district will use the funds effectively. 8