Budget Debate Heats Up

May is a key month for legislative committee and house deadlines, but the state budget has continued to be dominating issue at the Capitol this month. The biggest news has been that the state has collected $6.6 billion more in tax revenues than the Governor had forecast in January. This has significantly lowered California’s deficit to $9.6 billion.

Republicans have released a roadmap to close the deficit without raising taxes. Our proposal ensures that education and public safety are prioritized and fully funded, and makes cuts to other areas of government to balance the budget. We are also calling for structural reforms to improve our long-term fiscal health – public pension reform, regulatory relief that leads to job creation, education reform, and a spending cap.

Governor Brown released his May Revision this month as well. While the $6.6 billion is good news, the Governor’s proposal still relies on increasing the income tax, sales tax and vehicle license fee to collect an additional $11 billion in taxes in the 2011-12 fiscal year. His plan keeps these higher tax rates in place for five years which means California taxpayers will face an increased tax burden of over $55 billion, despite the fact that the deficit reaches nowhere near that amount.

First, the Governor said the taxes were needed to fund education and public safety. Then, he said the taxes were needed to pay off debt. Now, he says the taxes are needed to comply with the outrageous Supreme Court decision for releasing prisoners. Clearly, he is searching for any justification to raise taxes despite the need to actually do so.

Democrats and their allies are pressuring Republicans to vote for the tax increases even though it is clear that they are not necessary if we prioritize the money we have. One labor union, SEIU, is even sending mail pieces attacking Republicans and advocating for the higher taxes that would merely grow government spending by 31% over the next five years.

The deadline to pass a budget is June 15th and there is much work left to be done. I will be fighting for a budget solution that protects taxpayers and small businesses by prioritizing public safety and education without raising taxes.