Income Taxes.

INCOME TAXES. INITIATIVE CONSTITUTIONAL AMENDMENT. Prohibits taxes on or measured by income. Repeals authority of the State to impose income taxes on persons, corporations, or other entities. Repeals income tax exemptions for interest on state and local bonds. Repeals income tax exemptions for income of nonprofit educational institutions of collegiate grade within California. Repeals exemption for nonprofit organizations for business license taxes or fees measured by income or gross receipts levied by a county, city, city and county, school district, special district, or any other local agency. Summary of estimate by Legislative Analyst and Director of Finance of fiscal impact on state and local governments: This measure would result in a reduction in state General Fund revenues reaching nearly $40 billion annually by 2000-01. Absent legislative action to change other revenue sources, this revenue reduction would result in a commensurate decrease in state spending (potentially over half in K-14 school spending and the remainder in other spending). The measure would also result in administrative cost savings in the range of $400 million annually by 2000-01. Further, the measure would result in potentially significant reductions in local government revenues and uncertain impacts on expenditures, depending on state and local decisions in response to the measure.