SAN FRANCISCO — Californians voted Tuesday to pay higher taxes to help out schools, filling a fiscal hole that could have led to further budget turmoil.
Voters green-lighted Proposition 30, which will raise an estimated $6 billion annually by increasing sales taxes, and income taxes on the wealthy, to maintain funding levels for education.
The proposition, a linchpin of Gov. Jerry Brown's $91.3 billion budget, had 54% of the vote with all precincts reporting by Wednesday morning. If it had failed, "trigger cuts" built into the state budget would have cut school spending by $2.2 billion.
The measure temporarily increases California's sales tax by one-quarter of a cent and raise taxes on income starting at $250,000.
Another ballot measure also aimed at helping fund education by raising income taxes, Proposition 38, went down in flames, with more than 72% of voters rejecting it.
Standard & Poor's said in a report Wednesday that the passage of Proposition 30 would likely improve the state's credit quality as it finalizes California's budget for fiscal 2013.
"There is potential, in our view, for material improvement of the state's credit quality if lawmakers reach agreement on reforms that help stabilize the state's fiscal performance while the temporary taxes are in effect," the rating agency said in the report.
California's general obligation credit is rated A-minus by S&P and Fitch Ratings. Moody's Investors Service rates California A1, one notch higher than it rates Illinois.
And in further good news for the state's Democrats, according to early returns, California Democrats may also gain supermajorities in both the Senate and the Assembly.
The result would give them control of the legislative process and allow them to raise taxes unilaterally.