Authorizes Bonds for Housing Affordability Programs. Legislative Statute.

Authorizes $11.25 billion in State General Obligation bonds for Affordable Housing (only $1.25 billion for Vets).  Increases State cost of $500 to $600 billion annually for about 25 years to repay from General Fund tax revenue.

Increases State’s Rainy-Day Fund. Legislature Constitutional Amendment.

Increase from 10% to 20% the amount of General Fund tax revenue.  Voters approved in 2014 a 10% increase.  Eliminates the requirement that taxpayers receive tax rebates if revenues exceed the spending limit. 

Provides Permanent Funding for Schools and Health Care by Extending Existing Tax on High Incomes, Initiative Constitutional Amendment

Makes permanent the existing 2012 voter-approved temporary tax rates for high-income Californians. In 2016 voters approved Prop 55 to extend these higher rates until 2030.

The top 2% of California taxpayers pay these higher rates which represents about half of all state income taxes.

Repeals Prohibition Against Public Financing of Election Campaigns.  Legislative Statute. 

Repeals a previously approved ban on public financing of political campaigns. Allows the state and local governments to use taxpayer funds to finance local candidates.  This was tried to get through the Legislature in 2016, but the Courts rejected it and ruled voters must decide.

Changes Recall Election Process for Statewide Offices.  Legislative Constitutional Amendment

Under current law, voters decide at the same election whether to recall a state officer, and who will replace that officer if recalled.  Under this measure, if the Governor is recalled, the Lt. Governor becomes Governor for the remainder of the term or until a successor is elected.  For other recalled officers, the office will remain vacant until filled by a special election. 

Creates Loan Program for Middle-Income Buyers of Qualified New Homes. Initiative Statute.

Authorizes $25 billion in bonds to offer eligible buyers fixed-rate mortgages for up to 17% of purchase price of a newly constructed home priced below about $1.5 million.  Borrowers must be CA residents, occupy the home, income requirements, and pay at least 3% down.  Bonds repaid by mortgage payments, not the State. Largest housing bond in California history. This proposition does nothing to address the underlying reasons housing is so expensive in California. 

Authorizes Bonds for Immunology Medical Research. Initiative Statute.

Authorizes $8.4 billion in general obligation bonds for immunology and immunotherapy research.  Increased State cost of $500 million to $600 million annually for about 20 years to repay the research bond. Some or all of the cost offset if the funded research generates revenue.

Prohibits Citizens From Voting Unless They Present Government-Issued Identification.  Initiative Constitutional Amendment.

Photo ID is required for in-person voting.  Requires the last four digits of government-issued identification on mail-in ballots.  Increases trust and confidence in our elections. 

Imposes One-Time Tax on Certain Taxpayers.  Initiative Constitutional Amendment and Statute.

Imposes 5% tax on certain taxpayers with assets over $1 Billion.  Exempts revenues from constitutional requirements for school funding budget reserves and spending limit. This proposition is a Trojan Horse.  Gives the State Legislature power to amend the measure—without voter approval.

Independent legal analysis found Prop. 40 opens the door to expanding the tax to the assets of ALL CALIFORNIANS—savings, home equity and even retirement funds.  Prop 40 is opposed by Labor, Business, Democrats, Republicans, Teachers, Firefighters, Gov. Newsom, Republican and Democratic candidates for Governor.

Prohibits New State Taxes that Exclude Revenues from State Spending Limit. Requires Audits for New State Special Taxes.  Initiative Constitutional Amendment. 

Nullifies state taxes enacted after January 1, 2026 that exempt their revenues from voter-approved state spending limit.  Requires pre-election and recurring audits of programs funded by new special taxes.

Prohibits New State Personal Property Taxes and Certain Retroactive State Taxes.  Initiative Constitutional Amendment.

The State could not establish new taxes on the ownership of financial assets or other personal property.  California’s Constitution currently allows the Legislature to tax retirement and savings (that you already paid taxes on when you earned it).  This Proposition protects Californians from double taxation.  Prohibits new and retroactive taxes on personal property including retirement and savings. 

Nullifies taxes enacted after January 1, 2026 that conflict with this measure. 

If both Prop 40 and Prop 42 passes, the Proposition with the most votes prevails.

Limits Voters’ Ability to Raise Revenues for Local Government Services.  Legislative Constitutional Amendment.

Increases percentage of votes needed to approve any proposed local special taxes for a majority (over 50%) to two-thirds beginning January 1, 2027. 

Requires Community Health Clinics Spend 90% of Revenue on Program Services.  Initiative Statute.

Imposes penalties on nonprofit Federally Qualified Health Centers (clinics providing primary care to medically underserved areas and populations) that spend less than 90% of revenue on health care services. Items as simple as patient transportation costs are excluded from the 90% calculation.  This increases mandates and costs, threatening clinics ability to provide patient care.  Trusted healthcare experts warn that Prop 44 would trigger $1.7 billion in penalties in the first year alone, causing clinics across California to close.

Modifies Environmental Review for Certain Projects.  Initiative Statute.

Amends California Environmental Quality Act (CEQA) to expedite environmental review for certain projects (including most housing, transportation, water, and health projects) by setting deadlines to complete environmental review and resolve lawsuits challenging project approvals.  New procedures would tighten time limits for environmental review and court challenges.  CEQA has been weaponized to block and delay housing.  This is the first opportunity for CEQA reform by voters.