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 recently revised budget numbers show that California's budget deficit is nearly $6 billion more than the governor projected in January.

The New York Times reports 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?


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