The governor's tax proposal would bring in as much as $50-billion dollars over the next seven years. It would raise the sales tax by a quarter-of-a-cent and increase income taxes on individuals earning more than $250-thousand dollars.
John Kabateck is with the National Federation of Independent Business in California. He says raising taxes may force small businesses to lay off employees.
KABATECK: "A higher tax on income is not a smack to the rich but hits small business owners the hardest, since many of them pay individual taxes, not corporate taxes."
But Dan Newman with the governor's tax initiative campaign says the state needs the money.
NEWMAN: "We can't keep cutting public education and public safety and expect to remain an economic powerhouse that can support small businesses and create jobs."
A recent Field poll found 52 percent of registered voters support the initiative, while 35 percent are opposed.