Brown Banks on Tax Hikes to Bridge Budget Gap

(AP) Brown to detail budget for tackling $16B shortfall
By JUDY LIN
Associated Press
SACRAMENTO, Calif.
California Gov. Jerry Brown will lay out details of a revised state spending plan Monday after announcing over the weekend that the state’s budget shortfall has swelled to $16 billion.

Brown said the deficit is much larger than he predicted just a few months ago in part because tax collections have not come in as high as expected and lawsuits and federal requirements have blocked billions of dollars in state cuts.

In laying out a budget plan for the coming fiscal year that starts July 1, Brown will seek to balance the state’s finance in large part on voters approving higher taxes in November. His Saturday budget message and campaign pitch were the same: Raise taxes or endure crippling cuts to schools, colleges and public safety.

Democratic lawmakers who control the Legislature have resisted additional cuts Brown wanted made this year to health and social service programs. The recession has eroded many state services that have resulted in teacher layoffs, college tuition hikes, fewer medical benefits for the poor and elderly, and reduced child support programs for low-income mothers.

Republican lawmakers say tax increases will only hurt California’s economic recovery but the governor said he had to pursue a ballot initiative because GOP lawmakers would not provide the votes needed to reach the two-thirds legislative majority required to raise taxes.

Democrats, who control the Legislature, have been unwilling to enact deeper cuts so far this year.

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.

The governor is expected to propose a contingency plan just as he did in his January budget. If voters reject the tax hikes, a list of unpopular cuts would automatically kick in. The results mean that three weeks less of school, higher college tuition fees and reduced funding for courts.

Advocates say those trigger cuts could get worse under Brown’s revised budget.

About 20,000 pink slips were sent out to California public school teachers this year, although it’s unclear how many will actually be laid off until districts adopt their final budgets.