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).

2 comments for “Governor Eyeing November Initiative To Balance Budget

  1. Michael Gallagher
    January 19, 2012 at 10:19 am

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

  2. Michael Gallagher
    January 19, 2012 at 10:33 am

    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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