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Governor Proposes More Cuts, Tax Hikes as State Faces New $16B Budget Gap

Figure up from $9 billion projected in January.

Gov. Jerry Brown's revised budget numbers released Saturday show that California's budget deficit is nearly $6 billion more than the governor projected in January.

The New York Times reported that California now faces a $16 billion gap, up from $9 billion, in round numbers. How that'll impact cities, however, remains unclear — at least until voters weigh in at the polls in November on Brown's tax initiative.

"This means that we will have to go much further, and make cuts far greater than I asked for at the beginning of the year," Brown said on Youtube, where he released his original statement. "But we can't fill a hole of this magnitude 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 added.

The governor's proposal would raise income taxes for top wage earners and sales taxes statewide would increase a quarter of one percent, he said.

Bloomberg published a story Monday on the "urgency" of the tax initiative and explained it a little more:

"The plan would temporarily raise the statewide sales tax, already the highest in the U.S., to 7.5 percent from 7.25 percent. It would also boost rates on income starting at $250,000. Those making $1 million or more, now taxed at 10.3 percent, would pay 13.3 percent, the most of any state," the article stated.

John Meyers, a political editor and capitol reporter for ABC in Sacramento, tweeted Monday that statewide, $1.2 billion will be stripped from health and human services, $544 million from courts, $400 million in state worker costs and more cuts to higher education.

We're seeking comments from local residents. What do you think of the new state budget figures? Do you think it will impact you, your business or organization? How?

Carol May 16, 2012 at 07:00 PM
I agree!!! I don't understand why it's always schools, seniors, police, and fire that get cut every time there is a budget issue. Politicians stand before us, wringing their hands, with pained expressions, wondering how to fix it, and then threaten us with cuts to schools, seniors, police and fire - to SCARE us...and like stupid sheep, we vote yes to raise the taxes - to SAVE our kids... They NEVER look at the obscene salaries and pensions for "public" employees... In my book - a job is a job. I don't get this "we serve you so we get special/better benefits and compensation" rhetoric. They work a job just like you and me! Wake Up People!!!
Dave Robertson May 16, 2012 at 08:21 PM
People will vote for taxing the wealthy at a moment's notice. What this signals is that everyone else is next. California has already one of the highest income taxes in the nation. What makes California government so expensive? When are we going to figure out that this whole state is not like silicon valley? Not everyone is going to stick around to keep on paying - certainly not to keep these overbloated California pensions going without modifying them.
Roger May 17, 2012 at 03:05 AM
I understand polls predict the tax measure will not pass.
Mark Schoenbaum May 17, 2012 at 05:07 PM
the politicians have figured out it is easier to get a majority to impose taxes on a minority
janna nikkola May 17, 2012 at 11:22 PM
When Michael Frank first started whining about the $5 million annual budget deficit for the City of Novato, I analyzed his proposed budget for 2010-15 that was being presented to the City Council. Even as he was proposing cutting back on services to the taxpayers, and recommending staff layoffs for the police and fire departments (and no administrative staff layoffs at the time), labor costs for this 5-year period were increasing by 21% and contributions to PERS were increasing by 71% over this 5-year period "due to stock market losses". Rather than spending $6.7 million to renovate the old City Hall building which stands locked up and vacant and is only used twice a month for City Council meetings, that money should have been used to tear down the old wooden structures on Sherman Avenue and building a new City Hall building. Those old red buildings have long outlived their usefulness and serve no real practical purpose, and it's ludicrous to spend $15 million on a "City Hall" Building squeezed into the back part of a parking lot -- and we know that price tag will increase if it's ever built. Even the renovation of the old City Hall was over budget and not finished on time. I do not think the City Council is capable of building a new structure and completing it on time and on budget.

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