Monday, May 16, 2011

California economy is healing

but $6.6 additional revenue is a 13 month financial projection.   

Sacramento Bee 5/16/11.  "Gov. Jerry Brown this morning acknowledged California will take in $6.6 billion more in tax revenue than once thought over the next 13 months, but reiterated his call to extend tax increases to avoid deep budget deficits in future years. Brown's revised budget proposal pegs the deficit at $9.6 billion through June 30, 2012. The plan would eliminate 5,500 state jobs and 43 boards and commissions.

Brown's new budget assumes that trend will continue and projects the state will also take in $3.6 billion more in the next fiscal year.  Because of California's Proposition 98 guarantee, the state would owe K-12 schools and community colleges about half of those revenues. Brown's plan envisions schools getting about $3 billion more next year than it is getting this year.

Brown's January budget called for an extension of higher sales and vehicle tax rates, as well as a retroactive extension of higher income taxes, all for five years. The governor is still calling for the 1 percent sales tax extension and the 0.5 percent vehicle license fee extension after June, when the rates are slated to decrease.  But he is requesting that the 0.25 income tax surcharge be delayed until 2012, though it would last until 2016.

The move acknowledges the state's income tax surge this fiscal year, as well as the political difficulty state leaders would have faced by hiking the income tax retroactively by several months. Taxpayers have withheld income taxes since January assuming a lower rate than Brown was proposing. He said he wanted the voters to weigh in on the tax increases "as soon as possible."

Assembly Republicans last week issued a plan last week they said would balance the budget without tax extensions. The GOP proposal relies on a revenue bump smaller than the one Brown projects, as well as a roughly 10 percent reduction in state worker compensation and depleting special funds for mental health and childhood development.

Brown is still calling for the elimination of redevelopment agencies, which he originally believed would net the state $1.7 billion. He has scaled back his approach to enterprise zone tax credits for employers, which he originally wanted to eliminate. Instead, he will seek to limit the credits to new hires."

Posted by Kathy Meeh 


Anonymous said...

The SGS Newsletter

"John Williams’ Shadow Government Statistics" is an electronic newsletter service that exposes and analyzes flaws in current U.S. government economic data and reporting, as well as in certain private-sector numbers, and provides an assessment of underlying economic and financial conditions, net of financial-market and political hype.

Kathy Meeh said...

John Williams is an MBA economists, who appears to be a right-wing darling "lone wolf". It is certainly understandable that you would accept alternative sources and information, other than that of the USA government. Of course, the accounting department of the USA government has an entire professional staff of financial analysts, economists, and technical data personnel. And, the Federal Reserve monitors economic and currency issues.

Based upon all the search I will be doing, it appears that John William has been spewing economic bad news and promoting gold for years. But then, Williams may be viewing alternative data. No one has suggested the Bush presidency 8 years was good for the USA economy, or the middle-class. The severe recession our country is in the process of pulling out of is proof of that.

Anonymous said...

Kathy, stop feeding the trolls please. If you stop feeding them, they starve and go away.

Kathy Meeh said...

Anon (123), I'm very interested in what trolls think, and believe you should be as well. Its doubtful they are going away. As one troll said recently "we won elections" (referring to the national elections last Fall).

Similar to the ideological far left (which I think we know at little better), I don't think evidence will get in the way of troll thinking.