Thread: Brown: California facing $16 billion shortfall

Brown: California facing $16 billion shortfall


By JUDY LIN, Associated Press
Saturday, May 12, 2012

(05-12) 12:30 PDT Sacramento, Calif. (AP) --
California's budget deficit has grown to a projected $16 billion and the state will have to make severe cuts to schools and public safety if voters reject tax hikes in November, Gov. Jerry Brown announced Saturday.

The Democratic governor said the state's shortfall grew from $9.2 billion in January because tax collections have not come in as high and the economy isn't ramping up as fast as the administration had hoped. The deficit has also gone up because billions of dollars in state cuts have been blocked by lawsuits and federal requirements.

"This means we will have to go much farther and make cuts far greater than I asked for at the beginning of the year," Brown said. "But we can't fill this hole with cuts alone without doing severe damage to our schools. That's why I'm bypassing the gridlock and asking you, the people of California, to approve a plan that avoids cuts to schools and public safety."

Brown did not release details of the deficit Saturday but he is expected to lay out a revised spending plan for the coming fiscal year on Monday. It hinges in large part on voters approving higher taxes.

The governor has said tax increases are necessary to help pull the state out of a crippling decade shaped by the collapse of the housing market and recession. He warned that public schools, colleges and public safety will suffer deeper cuts without new taxes.

"What I'm proposing is not a panacea, but it goes a long way toward cleaning up the state's budget mess," Brown said. "Please join me in getting our state back on track and investing in our common future."
Under Brown's tax plan, California would temporarily raise the state's sales tax by a quarter-cent and increase the income tax on people who make $250,000 or more. Brown is projecting his tax initiative would raise as much as $9 billion, but a review by the nonpartisan analyst's office estimates revenue of $6.8 billion in fiscal year 2012-13.

Supporters of the "Schools and Local Public Safety Protection Act of 2012" say the additional revenue would help maintain current funding levels for public schools and colleges and pay for programs that benefit seniors and low-income families.

It also would provide local governments with a constitutional guarantee of funding to comply with a new state law that shifts lower-level offenders from state prisons to county jails.

A second tax hike headed for the November ballot is being promoted by wealthy Los Angeles civil rights attorney Molly Munger. Her initiative would raise income taxes on a sliding scale for nearly all wage-earners to help fund schools.

Anti-tax groups and Republican lawmakers say both tax increases will hurt California's economic recovery. State GOP Chairman Tom Del Beccaro kicked off a statewide campaign earlier this month, saying he wants to discuss alternatives to Brown's tax hikes.

The governor is expected to propose a contingency plan with a list of unpopular cuts that would kick in automatically if voters reject tax hikes this fall. In January, he said they would result in a K-12 school year shorted by up to three weeks, higher college tuition fees and reduced funding for courts.

Public schools would be cut nearly $5 billion. The University of California and California State University, already beset by student and faculty protests, each would face another $200 million reduction, while community colleges would be cut another $298 million. The leaders of the three higher education systems have said those additional cuts would force them to slash course offerings, lay off staff and raise tuition again.

Read more: Brown: California facing $16 billion shortfall

M3: MALDEF wants 2nd all-Latino district in California
http://www.alipac.us/ftopic-245709-0-days0-orderasc-.html
California Runs Out Of Money Again, Threatens To Go Nuclear

20 most economically stressed counties - 19 in California

VIDEO: White People are Leaving California

http://www.youtube.com/watch?v=DstK0iIuzWs
BANKRUPT - California Declares Fiscal Emergency

Families Packing Up and Leaving California INVASION

Why California is BROKE - Bell, CA admin $787,637 salary!

Miss California expresses views AGAINST amnesty

California Employment Level Sinks to Record Low as Fewer Wom

California tells online retailers to start collecting tax

DIVIDED - IMMIGRATION ISSUE POLARIZES PUBLIC IN

The average criminal alien in California arrested 7 times

California GOP Kills Resolution Supporting Arizona SB1070

I hope everyone votes NO for tax increases in CA....
When they stop paying for everything for illegal immigrants....we'll proabably be close to being in the black...instead of far , far, far in the red!!

Shortfall in California’s Budget Swells to $16 Billion

By ADAM NAGOURNEY
Published: May 12, 2012

LOS ANGELES — The state budget shortfall in California has increased dramatically in the last six months, forcing state officials to assemble a series of new spending cuts that are likely to mean further reductions to schools, health care and other social programs already battered by nearly five years of budget retrenchment, state officials announced on Saturday.

Gov. Jerry Brown, disclosing the development in a video posted on YouTube, said that California’s shortfall was now projected to be $16 billion, up from $9.2 billion in January. Mr. Brown said that he would propose a revised budget on Monday to deal with it.

“We are now facing a $16 billion hole, not the $9 billion we thought in January,” Mr. Brown said. “This means we will have to go much further and make cuts far greater than I asked for at the beginning of the year.”

Mr. Brown disclosed the news in a video that had all the trappings of a campaign announcement. In it, he aggressively accounted for the steps he said he had taken to try to scale back a $26 billion deficit he found upon taking office. And he urged viewers to back an initiative he is putting on the November ballot that would increase sales taxes by 0.25 percent and impose an income tax surcharge on wealthy Californians to try to stave off more cuts.

State officials said Mr. Brown’s proposal would include a package of immediate cuts, as well as others that would be triggered only if voters failed to approve his tax plan. The sales tax increase would expire after four years, while the income tax surcharge would last for seven years.

State officials said the shortfall was a result of disappointing revenue collections in April as California continued to struggle to pull out of the recession. “We are still recovering from the worst recession since the 1930s,” Mr. Brown said.

Still, the state controller reported that the state had exceeded spending by $2.1 billion as well, though Mr. Brown said court rulings and other actions that restricted California from making the cuts were at least partly to blame.

At the same time, the deficit projections — which have been increasing since Mr. Brown and the Democratic-controlled Legislature approved a budget last summer — suggest that the state may have been overly optimistic in estimating what kind of revenue it would take in. That has been a repeated problem in Sacramento as officials have struggled over the past five years with the state’s worst financial crisis since the Depression. Mr. Brown, in taking office last year, pledged to end what he said were the tricks lawmakers regularly used to paper over budget shortfalls.

http://www.nytimes.com/2012/05/13/us...t.html?_r=1&hp

CA DOWN $16B...

BROWN WARNS OF BIG CUTS...

'Worst recession since 1930s'...

RELATED: Gov. Jerry Brown targets state workers for cuts
Capitol on edge as Gov. Jerry Brown pushes taxes, budget cuts
Dreary April tax collections raise budget worries, controller says
-- Chris Megerian in Sacramento