The spending plan foresees a deficit of $9.2 billion through the next 18 months. Almost half of that is in the current fiscal year, he said. He called for $4.2 billion in cuts, mostly to welfare and programs for the poor. If the tax increase isn’t passed, Brown’s plan would cut another $4.8 billion in support for public schools and community colleges.
“The state of California (STOCA1) is a very generous, compassionate political jurisdiction,” Brown said. “When we have to cut spending, that spending is going to come from programs that are doing a lot of good. It’s not nice. We don’t like it. But the economy and tax statutes of California make just so much money available.”
Brown, a 73-year-old Democrat, wants to raise income taxes on individuals making at least $250,000 a year to 10.3 percent from 9.3 percent, and would boost sales levies to 7.75 percent from 7.25 percent.“
Brown had been scheduled to release his general-fund budget Jan. 10, but was forced to unveil it today after it was inadvertently posted to the Finance Department’s website.
The spending plan assumes the state will sell about $5.2 billion of municipal bonds through December, said Brown’s finance chief, Ana Matosantos.
California is Standard & Poor’s lowest-rated state, at A-,six levels below AAA. Moody’s Investment Service grades it A1, four steps below the top rating, tied with Illinois for the worst credit rating among states.”
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