Gov. Brown Now Says State Gov't Spending Will Exceed Revenue By $16 Billion In FY12-13, Asks Legislature To Make $8 Billion in Cuts & Voters To Approve Sales Tax Hike & Income Tax Increase on High Earners; Supports "Trigger Cuts" That Don't Spare Schools If Voters Reject Tax Increase
|(May 14, 2012) -- As carried LIVE this morning on LBReport.com, Gov. Brown proposed a revised FY12-13 budget that projects a $16 billion deficit (gap between state gov't spending and revenue) unless the state legislature makes $8 billion in cuts AND voters statewide approve a November ballot measure that would raise the state's sales tax by a quarter percent and raise the state's income tax on high earners (three-tiers starting at $250k for single filers, $500k for joint filers).
If both take place, the Governor proposes to increase funding for K-12 education by 16%...BUT if voters reject the proposed ballot measure, the Governor proposes that "trigger cuts" take effect that won't spare schools or public safety.
Reporters' Q & A followed, and pointed questions flew. To hear reporters' Q & A, click here
To see SacBee.com's report, click here.
In a release, the Governor says that his budget proposal will fund local governments that are implementing his "public safety realignment" (adopted by the state legislature last year), promising "a permanent funding structure so that local governments will have a reliable funding source into the future."
The Governor envisions a five percent cut to state employee compensation costs that [Governopr's release text] "will be achieved through a reduced workweek or a commensurate reduction in work hours and pay." (During Q & A, the Governor acknowledged this would have to be negotiated by public employee unions.)
The Governor also proposes to "restructure" trial court funding, "reducing General Fund support by $300 million on a one-time basis and requiring each trial court to use their available reserve. It delays court construction for a savings of $240 million and increases retirement contributions for state court employees."
In January, Governor Brown projected a roughly $9 billion FY12-13 deficit...but says that estimate has now grown to roughly $16 billion which he attributes to lower than expected tax receipts and actions by courts and Washington that he said have prevented CA from making cuts he favors.
The Governor said the $16 billion gap between current spending and revenue means the state legislature will have to make deeper cuts than were previously discussed even if voters statewide approve a November ballot measure that would raise the state sales tax by a quarter cent and an income tax increase on high earners (three-tiers starting at $250k for single filers, $500k for joint filers). If voters reject the ballot measure, the cuts would be even worse, he said.
The Governor's now-projected $16 billion deficit for FY12-13 comes despite the Dem legislative majority's approval last year of the Governor's proposed public safety "realignment" that now sends some state prison inmates back to county jails (where in L.A. County some are released early and paroled into local communities including LB).
It also results despite Sacramento's expected taxpayer savings from ending Redevelopment as it was historically practiced, an action that multiple City Halls (including Long Beach) have continued to criticize.
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