Updated Estimates on Revenue from Sales Tax Increase

House Bill 2377 proposes a referendum raising the state sales tax by 0.3 cents with the following stated intent:

An unprecedented shortfall in state general fund revenues has threatened the state's ability to fund vital health services and has harmed working families. For this reason, the legislature is asking the voters to approve temporary tax increases in order to fund health care and to support working families during this time of revenue shortfalls.

As the graph below shows, the referendum would raise an estimated $1.1 billion dollars over three years. $486 million will be available for the 2009-11 biennium. Most of the revenue raised will pay for health care including the Basic Health Plan. Twenty-two percent will be refunded to lower income working families.

Note: The bill does not specifically appropriate funds for the 2011-13 biennium.