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Governor Unveils Budget Proposal

Posted on Wednesday, May 18, 2011 9:55am

Governor Jerry Brown has rolled out an updated plan to balance California’s budget. He says the deficit is smaller but tax extensions are still needed.

According to the Governor, the state’s deficit is now down to about ten billion dollars. It was in the 26 billion dollar range at the start of the year. Lawmakers made significant reductions in March – and Brown says healthier-than-expected tax receipts will help even more. But he’s warning that they’re not enough:

“The economy in California is looking pretty good,” Brown says. “Not as good as it’s been – but it’s definitely on the mend. But we still have a ten billion dollar deficit and a wall of debt to come.”

Brown wants to use some of the tax windfall to pay down that debt. And while he says tax extensions are still necessary to erase the deficit, he’s shrinking his proposal a bit by eliminating one year of the personal income tax increase. He wants lawmakers to temporarily approve the income, sales and vehicle tax extensions and then ask voters to ratify them in a fall election. Brown says if they fail, “I think it’ll be very divisive for California. I think we’ll flounder. It will not be good for the credit rating. It will not be good for the business climate.”

But Brown stopped short of offering a “Plan B” – or a budget proposal without the tax extensions:

Brown’s plan also includes about three billion dollars more for schools than his original January proposal and eliminates more than 40 boards and commissions. Now that Brown has made his preferences clear, he says the next move is up to lawmakers.

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