California's Budget Deficit Soars to $16 Billion

Tax collections and slow growing salaries are just two of the reasons for the increase.

Sunday, May 13, 2012  |  Updated 7:32 AM PDT
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On the Mend: Governor's State of the State Message

Justin Sullivan/Getty Images

California Gov. Jerry Brown says the state's fiscal health is getting worse.

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NewsConference: California Governor Jerry Brown, Part 1

One-on-one with Governor Jerry Brown. In part 1 of the interview, the governor talks about why he is on the road campaigning for his effort to get tax hike extensions on the ballot before the voters. The governor explains the road-blocks he is facing from the Republican legislators.

NewsConference: Part 2 of the Interview With Gov. Jerry Brown

Gov. Jerry Brown talks about the GOP 5, why the First Lady yelled at Sen. Bob Dutton and the John and Ken radio show.
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California's budget deficit has grown to a projected $16 billion and the state will have to make severe cuts to schools and public safety if voters reject tax hikes in November, Gov. Jerry Brown announced Saturday.

  The Democratic governor said the state's shortfall grew from $9.2 billion in January because tax collections have not come in as high and the economy isn't ramping up as fast as the administration had hoped. The deficit has also gone up because billions of dollars in state cuts have been blocked by lawsuits and federal requirements.
 
"This means we will have to go much farther and make cuts far greater than I asked for at the beginning of the year," Brown said. "But we can't fill this hole 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 did not release details of the deficit Saturday but he is expected to lay out a revised spending plan for the coming fiscal year on Monday. It hinges in large part on voters approving higher taxes.
 
The governor has said tax increases are necessary to help pull the state out of a crippling decade shaped by the collapse of the housing market and recession.

“State spending is now at its lowest level in decades. Unfortunately, our work is not finished. We’re still recovering from the worst recession since the 1930s."

He also warned that public schools, colleges and public safety will suffer deeper cuts without new taxes.
 
"What I'm proposing is not a panacea, but it goes a long way toward cleaning up the state's budget mess," Brown said. "Please join me in getting our state back on track and investing in our common future."
 
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.
 
Supporters of the "Schools and Local Public Safety Protection Act of 2012'' say the additional revenue would help maintain current funding levels for public schools and colleges and pay for programs that benefit seniors and low-income families.
 
It also would provide local governments with a constitutional guarantee of funding to comply with a new state law that shifts lower-level offenders from state prisons to county jails.
 
A second tax hike headed for the November ballot is being promoted by wealthy Los Angeles civil rights attorney Molly Munger. Her initiative would raise income taxes on a sliding scale for nearly all wage-earners to help fund schools.
 
Anti-tax groups and Republican lawmakers say both tax increases will hurt California's economic recovery. State GOP Chairman Tom Del Beccaro kicked off a statewide campaign earlier this month, saying he wants to discuss alternatives to Brown's tax hikes.
 
The governor is expected to propose a contingency plan with a list of unpopular cuts that would kick in automatically if voters reject tax hikes this fall. In January, he said they would result in a K-12 school year shorted by up to three weeks, higher college tuition fees and reduced funding for courts.
 
Public schools would be cut nearly $5 billion. The University of California and California State University, already beset by student and faculty protests, each would face another $200 million reduction, while community colleges would be cut another $298 million. The leaders of the three higher education systems have said those additional cuts would force them to slash course offerings, lay off staff and raise tuition again.

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