CA: Brown warns of school cuts if taxes rejected

by
January 6, 2012

By Judy Lin, Associated Press

SACRAMENTO, Calif.—California faces a smaller budget deficit in the coming fiscal year but will require nearly $5 billion in cuts to public education if voters reject Gov. Jerry Brown’s plan to raise taxes in the fall, the governor said Thursday in releasing its budget proposal for the 2012-13 fiscal year.

The governor’s office projected the state’s budget shortfall for the fiscal year starting July 1 at $9.2 billion, much more manageable than the $26.6 billion deficit the Legislature closed for the current year. Brown said the budget cuts he enacted this year, combined with additional cuts and his call for temporary tax increases in the coming fiscal year will all but end the massive deficits that have defined California’s fiscal planning for years.

He also noted that the state is being helped by an improving economy, which has led to a slight increase in tax revenue.

“We’ve cut the structural deficit substantially, and we now have the possibility of eliminating over the next couple of years the deficits that have plagued California,” he told reporters during an afternoon news conference.

Brown was forced to call the gathering suddenly because his Department of Finance mistakenly posted the budget plan online, four days before the governor had said he would release it.

The governor’s office estimates the total general fund budget for the coming year at $92.5 billion, about $7 billion more than the current year. The general fund pays the day-to-day operations of California government and is where the budget has been in deficit.

To address California’s ongoing shortfall, Brown is trying to gather support for a November ballot initiative that would raise the income tax on those making $250,000 or more a year and boost the state sales tax by a half cent. The higher taxes would raise about $7 billion a year and expire in 2017, a date by which Brown hopes the economy has improved enough to bring a healthy flow of tax revenue back to the state.

To read more, visit: http://www.boston.com/news/education/higher/articles/2012/01/05/brown_warns_of_school_cuts_if_taxes_rejected/

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