California Faces $1.9B Deficit
According to the Legislative Analyst’s Office (LAO) , California’s budget deficit will be only $1.9 billion deficit through June 2014. The LAO said there is cause for rejoicing because it had predicted one year ago that the figure would be an astronomic $13 billion and in 2010 it had reckoned the deficit to wind up being $25 billion.
The LAO quietly admitted that there will still be a small ($1.9 billion!) deficit because spending is higher than they expected and Gov. Jerry Brown’s closure of redevelopment agencies won’t bring home quite as much bacon.
So just how did Brown manage such a recovery? The Democrat way, of course: raise taxes with the passing of Proposition 30. Before it passed, California already boasted the2nd worst state income tax rate in the nation; now it is the highest. The 9.3% tax bracket slams into individuals making at least 48,029. Because Prop 30 is retroactive, “millionaires’ tax” rate is 13.3% – including capital gains. California’s income tax rate is 21% higher than Hawaii, the 2nd highest state, and 34% higher than Oregon.
But the LAO chortled:
Taxes provided by Proposition 30 have combined to bring California to a promising moment: the possible end of a decade of acute state budget challenges. Our economic and budgetary forecast indicates that California's leaders face a dramatically smaller budget problem in 2013-14 compared to recent years.
Adding insult to injury, the LAO predicted there would be surpluses starting at $1 billion in 2014-15, swelling to more than $7 billion in 2017-18, but only if Brown and the California legislature restrain program growth, without reversing their “austerity” measures.
First of all, why should the government have a surplus? It’s the taxpayer’s money they’re stealing. And second of all, does anyone believe that Brown and his legislature, where he has a supermajority, will not make handouts once they have the money in hand?
But Brown, with rank disingenuousness, gleefully said:
This report validates the hard work the state has done to cut its deficit and balance its budget over the long term. California is now on the path for a fair and sustainable budget as long as we continue to exercise fiscal discipline and pay down debt.
The Gospel according to Governor Moonbeam: where hiking taxes to the moon is called “exercising fiscal discipline and paying down debt.”