A coalition backed by some of the biggest names in California politics and a billionaire financier is readying for the ballot a sweeping overhaul of the Golden State's tax system.

The proposed initiative is part of a series of recommendations for "remedying what ails California governance" drafted by Think Long Committee for California, an independent coalition focused on long-term fixes for Golden State governance.

The committee's 23-page report, set to be released Monday, is the product of more than a year of collaboration by some of California's most influential political minds. The bipartisan work group included former governors, legislative leaders, U.S. secretaries of state, seasoned state finance directors and leaders in business and labor unions.

"This is one of those things where people really didn't have any interest, they were just trying to find a vision to fix California. Everyone was focused on the long term," said former Assembly Speaker Bob Hertzberg, a member of the committee.

"As Washington is in gridlock, maybe California can lead the way again by showing that we know how to fix things."

Central to the recommendations are two proposed ballot measures that the committee's chairman, billionaire investor Nicolas Berggruen, has pledged to back with at least $20 million of his own fortune.

One proposed initiative would overhaul the state's tax system to raise an additional $10 billion annually for the state budget, according to a draft of the plan obtained by The Bee. The biggest change: Californians would pay sales tax on all services except health care and education starting in July 2013.

The tax hike would boost state revenues by about 11 percent starting in 2013-14. The money would help retire debt in the first year and later go toward K-12 schools, higher education and local governments.

The state would also simplify the personal income tax system in 2014, charging no tax on income up to $45,000 for joint filers; 2 percent on income between $45,000 and $95,000; and 7.5 percent on income above $95,000.

The state would eliminate all personal income tax deductions except those on mortgage interest, property taxes, charitable donations and research and development.

The sales tax rate on goods would drop by half a percentage point.

On average, taxpayers at every income level would pay more due to the new service tax. Households with adjusted income below $20,000 would pay $71 more annually, though they may be eligible for a sales tax rebate.

The plan lowers the corporate tax rate from 8.84 percent to 7 percent. It also raises taxes on out-of-state firms by requiring them to pay based on their share of sales in California.

The proposal faces a potential land mine: the state's powerful education lobby. The plan would eliminate a constitutional requirement that the state must repay schools when imposing certain budget cuts. It would also relieve the state of an existing $10 billion obligation to schools.

The repayment requirement is a key feature of Proposition 98, the state's minimum guarantee for education funding. The California Teachers Association and other school groups rely on it as leverage in budget talks each year.

The Think Long committee emphasizes that schools would get at least $5 billion in additional funding from the new tax plan in exchange.

The group also plans to submit a constitutional amendment to create a new independent commission tasked with oversight and long-term planning for the state.

The 13-member Citizens Council for Government Accountability, appointed by the governor and legislative leadership, would have the power to directly place proposed initiatives and constitutional amendments on the ballot and have authority to issue subpoenas in its role as watchdog of state government.

The council also would coordinate with existing state agencies to develop a "Golden State Strategic Agenda" to guide the state's long-term growth and infrastructure needs.

"The idea is to be able to have a body that thinks about California as a whole," said Nathan Gardels, an adviser to the committee.

The committee expects to file language for the ballot measures with the state attorney general in the coming weeks, setting its sights on qualifying both in time for the November 2012 election.

Think Long's report, "A Blueprint to Renew California," also calls for changes in other areas of state governance, including the budget and initiative processes, and details proposals for job growth and improving public education.

In addition to pushing for those changes through legislative and regulatory action, the committee endorsed a budget and governance initiative unveiled earlier this month by California Forward and a measure to change current term limits for legislators that has qualified for the June 2012 ballot.

While Think Long is far from the first group to push for major structural changes for California, its financial backing sets it apart from several recent efforts that faltered due to lack of money.

"If this is the way that they really feel you fix California and they have very deep pockets behind them, they may be able to really flood the airwaves with a really effective messaging campaign," said Jessica Levinson, a professor at Loyola Law School.

While voters may be in the "mood for reform because things just aren't getting better," Levinson cautioned that the group's biggest challenge could be breaking down complex changes, and their urgency, to voters.

"If it takes more than two sentences to explain something to the electorate, your chances start decreasing exponentially," she said.

TAXES AT A GLANCE

One Think Long Committee proposal would overhaul the state's tax system to raise an additional $10 billion annually. Among the changes:

• Californians would pay sales tax on all services except health care and education starting in July 2013.

• The state would simplify the personal income tax system in 2014, charging no tax on income up to $45,000 for joint filers; 2 percent on income between $45,000 and $95,000; and 7.5 percent on income above $95,000.

• The state would eliminate all personal income tax deductions except those on mortgage interest, property taxes, charitable donations, and research and development.

• The sales tax rate on goods would drop by half a percentage point.

• On average, taxpayers at every income level would pay more because of the new service tax.

• The plan lowers the corporate tax rate from 8.84 percent to 7 percent. It also raises taxes on out-of-state firms.

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Call Torey Van Oot, Bee Capitol Bureau, (916) 326-5544.