I’m guessing that Gov. Schwarzenegger thinks something very different when he sees this slogan these days: The thing that won’t die, in the nightmare that won’t end.

It’s not the Terminator but rather, the budget.

The state of California is facing a $21.3 billion shortfall. Billion.

And the measures that Schwarzenegger hoped would be a step towards resolving those issues failed – and failed miserably. Voters in California voted down five of six proposals on Tuesday with more than 60% of voters issuing a resounding “no.”

The one proposal that did pass prevents certain state officials from receiving pay raises when California has a budget deficit. But other measures failed. The controversial proposals included shortening the school year by a week and a-half, cutting education jobs, eliminating health insurance for nearly 250,000 children, laying off state firefighters and limiting funds paid to local governments.

Cuts are inevitable now. So are higher taxes. Just months after California cut billions in spending, raised the state sales tax by a penny, borrowed and yes, begged, from the federal government, the state is expected to once again raise taxes. This time, income taxes are the likely target.

But wait… Before you start writing those “what did you expect from California?” comments, consider this statistic: 33 of 50 states have either already raised taxes or are considering raising sales, income and/or excise taxes to make up shortfalls in their budgets. My own state, Pennsylvania, is one of them.

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Author

Kelly Erb is a tax attorney and tax writer.

Comments

  1. I understand that Californians don’t want their (well, our) programs to be cut, and we don’t want to pay more taxes either… but the money has got to come from somewhere. I personally think cutting the school year one and a half week shorter has the least overall impact (of course, it’s all relative) on the quality of service while saving money, so I support that.

    But either way, there will be cuts, and perhaps tax increases. Money isn’t just going to magically appear, so things will happen whether we like it or not.

  2. Everybody complains about taxes.

    Politicians (especially Republicans) complain about “tax and spend”. Few, however, complain about “spend”, though — at least not when Government spending benefits them. I’m one of them: I sure don’t want cuts in Social Security, police and fire protection and the State University system, which employs me.

    Well, you get what you pay for and, at some point, you have to pay for what you get. The proposed cuts in the California budget will be painful. Many, in the long run, probably will be stupid, especially cuts in the education budget. At least this time around California will raise income taxes rather than sales taxes — spread the burden more equitably.

  3. JBruce, wow so how do you feel now that the sales tax AND income taxes AND car taxes have all been increased? What is left to increase. Prop tax.
    here’s the kicker though : the tax would have to nearly double to close the current budget gap. oops.

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