California News

$16B state deficit fuels further budget-cut proposals from Governor Brown

Monday, May 14, 2012
Gov. Jerry Brown painted a grim picture of Californias budget on Monday, May 14, 2012, after announcing a $16 billion deficit. From taxpayers to state workers, the governors budget proposal has far-reaching impacts across California.

Gov. Jerry Brown painted a grim picture of California's budget shortfall on Monday following the announcement of a $16 billion deficit.

Brown announced a new plan to cut $8 billion from next fiscal year's budget and said it could take at least two years to get out of the financial mess.

His revised plan slashes spending to almost every part of government, including a proposed 5-percent pay cut for state workers. Programs that could see deep cuts include welfare, healthcare and higher education. However, Brown did vow to protect K-through-12 education and public safety and to raise funding for K-through-12 education by 16 percent.

To make up for the rest of the deficit, the governor proposed a raise in taxes. An initiative on the November ballot asks voter to approve a temporary tax increase on high-income earners. It will also increase the sales tax by a quarter percent.

"We're going to have to cut deeper, and that's why I'm linking the serious budget reductions, real increased austerity, with a plea to the voters: Please increase taxes temporarily on the most affluent and everyone else with a quarter of a cent sales tax," he said during a Monday morning news conference in Sacramento.

If voters do not pass the initiative on the November ballot, another $6 billion in additional cuts will go into effect January 1.

Republicans say raising taxes will only slow the state's economic recovery. Lawmakers will have until June 15 to approve a spending plan.

The $16-billion deficit is nearly twice as high as the $9.2 billion Brown estimated in January. He said the deficit is much larger than previously thought because tax collections have not come in as high as expected and the federal government has blocked state spending cuts.

This latest budget proposal comes at a time when many have already protested deep cuts made to education, public safety and other programs.

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