Officials Say Tax Windfall Should Go To State Deficit
Sacramento, CA – The legislative analyst´s office says California can expect a tax windfall for the next budget year that is $2.3 billion more than Governor Schwarzenegger forecast in his budget projection last month.
But rather than celebrate by increasing spending, analysts say the governor should instead direct the unanticipated money toward closing the state´s multibillion dollar structural deficit.
The governor´s budget plan for the fiscal year that begins July 1 provides a 7 percent boost in spending over the current fiscal year without raising taxes, thanks mostly to additional tax revenue.
The legislative analyst´s report says California can expect an extra $1.3 billion in the fiscal year that starts July 1 and another $1 billion the following year. But California still faces $20 billion in debt at the end of 2006-07.