"The proposal would also suspend for two years businesses' ability to deduct past net operating losses from their state tax bill.
Although leaders said their agreement does not borrow money from local governments and transportation, it is expected to tap several hundred million dollars from redevelopment agencies around the state. San Jose officials have warned that doing so could jeopardize projects such as the planned expansion of the McEnery Convention Center.
The agreement is also expected to propose essentially borrowing billions of dollars in future years from an expanded lottery."
The new budget deal seems to delay California's financial burden, hitting the economy when "economists have little hope that revenue is on the rebound," M&C reported.
Mike Zapler continued, "Legislative leaders acknowledged the agreement was far from ideal but said the budget delay was inflicting real pain. The impasse caused billions of dollars to be withheld from schools, nursing homes and other institutions that rely on state funds. "'I would've liked to have resolved the problem," Senate President Pro Tem Don Perata, D-Oakland, said. "But the votes were not there. "... It was time to end this. I wish it would've ended differently.'"
2 comments:
A better permanent solution would be to demand that the state of California it's equal share of the federal tax revenue.
California has paid more to the federal government than it has received in return every single year since 1986. In 2005 (the most recent statistic I could find), the state received only 78 cents for every dollar that her citizens paid in federal taxes. Put into figures for the 2005 tax year, that's more than $47 billion that California sent to Washington and never saw again. For that, you can thank the welfare states (Louisiana, Mississippi, etc.). Since 1989, the year many of us were born, California has a federal tax return deficit of $513 billion.
If California wants to know how to fix her deficit, maybe she should look to the Beltway for some answers.
The raw figures I used can be found here:
http://www.taxfoundation.org/research/show/22685.html
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