Higher tax revenue complicates Brown’s tax pitch
SACRAMENTO—California’s tax revenue is running well ahead of projections, but the governor’s office said Friday that has not simplified the challenge of closing the state’s $15.4 billion deficit.
Lawmakers and Gov. Jerry Brown also have to consider possible cost increases involving education, health care and prisons, state Director of Finance Ana Matosantos said.
Her statement came a day after the Legislative Analyst’s Office calculated the state has received $2.5 billion more than projected in personal income, corporate and sales taxes since the fiscal year started July 1.
The Democratic governor has proposed a mix of spending cuts and tax extensions to close the budget gap and is expected to present a revision on May 16.
The additional revenue could bolster the position of GOP lawmakers, whose opposition to extending tax increases thwarted Brown’s budget proposal earlier this year.
The governor wants a special election so voters can decide whether to extend increases to personal income, sales and vehicle taxes for five years. The increases are set to expire by July 1.
“Obviously, this takes pressure off the concept of raising taxes,” said Republican Sen. Bob Huff of Diamond Bar, vice chairman of the Senate Budget Committee.
He said the additional tax revenue suggests the California economy is beginning to revive. But the state cannot expect a full recovery if it taxes residents further, he said.
Democrats have warned that without tax extensions, the state will have to make devastating cuts to schools, universities and other programs.
Brown already signed bills that cut the budget gap from $26.6 billion by shifting some state responsibilities to local governments, transferring money between government accounts and reducing spending on programs for the state’s most vulnerable residents.
Brown’s next crack at the deficit will likely involve his previously announced efforts to eliminate redevelopment agencies and a corporate tax break.
Most Californians support the mix of cuts and taxes, but they want the state’s wealthiest residents to bear the brunt of tax increases, according to a survey last month by the Public Policy Institute of California.