Thursday, February 19, 2009

A New California Budget: Program Cuts And $12 Billion In Tax Hikes

From The Los Angles Times:

After a three-month impasse, the California Legislature has approved a budget package that addresses the state's massive deficit with billions of dollars in new taxes and program cuts. There are billions of dollars in cuts to schools, healthcare institutions, higher education and programs for the poor.

If signed by Gov. Arnold Schwarzenegger, who helped devise the package, the plan also would raise personal income taxes and the state sales tax, although a 12-cent-per-gallon increase in gasoline taxes was eliminated in the final hours. The gas tax would be replaced with federal economic stimulus money.

The final version of the plan would raise the state sales tax by 1 percentage point and nearly double the vehicle license fee, to 1.15%. The plan would reduce the dependent credit that Californians are allowed to claim on their taxes. The package also would increase personal income tax rates by 0.25 of a percentage point.

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