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Governor Eyeing November Initiative To Balance Budget

Governor Eyeing November Initiative To Balance Budget


By Staff Reports

(Victorville)–Governor Edmund G. Brown Jr. has proposed a $137.3 billion budget for 2012-13 that aims to close a projected $9.2 billion General Fund deficit by relying largely on tax increases from a November ballot initiative. The Governor’s tax initiative, including for 2011-12 and 2012-13, $5.8 billion in new income taxes for high-income taxpayers, and $1.2 billion from a half-cent increase in the state sales-and-use tax. The administration has proposed a “surcharge” on employers totaling more than $470 million to finance future interest payments for funds borrowed from the federal government to pay California’s unemployment insurance benefits and repay the funds borrowed from the employee-financed disability fund. The administration is also including in the budget up to $1 billion in revenues from its new, controversial tax on cap-and-trade auction transactions in the Air Resources Board’s greenhouse gas reduction program. Legislative analysis show these estimates are a “bigger question mark than usual” due to uncertainty surrounding the economic recovery, and that the tax increases will bring a much lower figure than the administration’s predictions which may mean, “the Legislature will have to pursue billions of dollars more in budget-balancing solutions.”  If the tax increases do not pass in November, the Governor has proposed a contingency plan to reduce spending by $5.4 billion beginning in 2013. Major reductions will be to K-14 education ($4.8 billion), higher education ($400 million), courts ($150 million), and various public safety programs, mostly in the Resources Agency ($28 million).


  1. Michael Gallagher January 19, 2012

    I like plan B better already. Tax and spend is a failure every time.

  2. Michael Gallagher January 19, 2012

    We already spend more on education than ever and students are failing. And what happened to all the lottery money that was intended for schools?


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