Bloomberg News

Brown Seeks 7% California Spending Boost to $92.6 Billion

January 06, 2012

(Updates with details on tax increase in third paragraph.)

Jan. 5 (Bloomberg) -- California Governor Jerry Brown proposed $92.6 billion in spending for the year starting in July, an increase of about 7 percent, which will count on voters approving $7 billion of higher income and sales taxes in November.

The spending plan foresees a deficit of $9.2 billion. If the tax increase isn’t passed, Brown’s plan forecasts a $4.8 billion cut in support for elementary, high school and community-college education.

“The state of California 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.

The most-populous state cut aid last year to universities, shifted responsibility for prisoners to counties and dissolved local redevelopment agencies. Last month, Brown had to trigger $1 billion in additional cuts he built into the current year’s budget after revenue fell below his estimates.

Brown was scheduled to release his budget Jan. 10, but was forced to unveil it today after it was inadvertently posted to his Finance Department’s website early.

--With assistance from Alison Vekshin in San Francisco. Editors: Pete Young, Ted Bunker

To contact the reporters on this story: Michael B. Marois in Sacramento at mmarois@bloomberg.net; James Nash in Sacramento at jnash24@bloomberg.net

To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net


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