Tuesday, February 01, 2011

California Weighs Vote To Renew Tax Increase

Yesterday, the Governor of my home state launched a campaign asking voters to help reduce California's $25.4 billion budget deficit by increasing both income and sales tax rates. Let’s see how many people will say “yes” to higher taxes with some of the highest unemployment levels around…

The Wall Street Journal reports:

    In a State of the State address, his first since becoming governor, Mr. Brown plans to underscore the seriousness of the fiscal crisis facing the nation's most populous state and press lawmakers for a prompt response to his proposal for a midsummer election asking voters to extend temporary tax hikes, according to people familiar with his plans.

    Earlier this month, Mr. Brown proposed an $84.6 billion budget for the fiscal year ending June 30, 2012.

    His budget calls for $12.5 billion in cuts, contingent on voter approval of a five-year tax extension that would generate $12 billion during the fiscal year.

    Mr. Brown decided against simply asking the legislature for the tax extensions, which would have broken a campaign pledge. His ballot measure would specifically propose a five-year extension of a temporary increase enacted in 2009 on personal income tax, sales tax and vehicle license fees.

    In a poll last week from the Public Policy Institute of California, 53% of respondents approved of that plan, while 41% disapproved. If the tax extension fails, California's legislature will have to restart budget talks from scratch.

Read more here

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