Gerry Clinchy
05-13-2012, 09:43 AM
AP
The Democratic governor said the shortfall grew from $9.2 billion in January in part because tax collections have not come in as high as expected and the economy isn't growing as fast as hoped for. The deficit has also risen because lawsuits and federal requirements have blocked billions of dollars in state cuts.
"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 in an online video. "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."
So ... tax revenues are down, so they can't meet expenses. There are not enough votes in the legislature to get a tax increase passed, so Brown wants to put it on a ballot for the taxpayers.
Typically, when taxes are increased in times of duress, overall tax revenues decrease even further. When taxes take more $, there is less money to go into the private sector to purchase products. As necessities like food and energy increase in costs, discretionary spending has already curtailed. And they wonder why the economy is weak?
Interesting, too, that lawsuits and Fed mandates have prevented spending cuts.
The Democratic governor said the shortfall grew from $9.2 billion in January in part because tax collections have not come in as high as expected and the economy isn't growing as fast as hoped for. The deficit has also risen because lawsuits and federal requirements have blocked billions of dollars in state cuts.
"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 in an online video. "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."
So ... tax revenues are down, so they can't meet expenses. There are not enough votes in the legislature to get a tax increase passed, so Brown wants to put it on a ballot for the taxpayers.
Typically, when taxes are increased in times of duress, overall tax revenues decrease even further. When taxes take more $, there is less money to go into the private sector to purchase products. As necessities like food and energy increase in costs, discretionary spending has already curtailed. And they wonder why the economy is weak?
Interesting, too, that lawsuits and Fed mandates have prevented spending cuts.