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Big Question Mark Still Surrounds State Budget

Parties divided over whether to fix or fund this year’s budget.

ImageAs tough economic times have fallen on most of the country, the state of California is no exception. A battle is gearing up to solve the pending budget crisis, as legislators and the governor have different ideas on how to pass a balanced budget already several weeks overdue.

 

Some officials want to look at increasing tax income. While property tax incomes are well protected by Prop 13, some are looking into a sales tax overhaul, which could include taxing select services.

 

Currently, the State of California does not tax a majority of services, such as a car mechanic’s labor or massage services. Broadening sales tax to include such services would pump extra money into the heavily overextended budget.

 

But if that means raising the total amount Californians are taxed, the Republicans are not on board. Assemblywoman Sharon Runner called in to KHTS AM 1220 Monday morning to explain.

 

“When you’re struggling to pay more for food, for fuel…for us to say ‘we’re going to add this new tax’ it just puts more burdens on the hard working families in California and we just have to say no.”

 

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“Everybody says tax the rich, but if you do that, they’re going to move away because they have the ability to do that,” Runner commented. “And they’re going to take the jobs and the employee base that we need in California away.”

 

Runner said that the state needs to learn how to manage its finances.

 

“We just need to live within our means like any other family,” she said. “Our whole issue is reforms in the budget process.” 

 

That is certainly the “issue behind the issue.” Should  at the state find new ways to keep funding its ballooning budget deficits, which have occurred just a few years after record revenue, or should they should limit their own spending? 

 

The Governor’s plan to balance the budget did touch upon some reform at the state level, however it also went after new revenue by leveraging future lottery income for upfront cash, which he proposed would be put in a “rainy day fund.”

 

This plan would require voter approval in November, and if it fails to pass, Governor Schwarzenegger plans to pursue a temporary 1 cent sales tax increase.

 

All this disagreement on how to solve the budget dilemma, be it on a temporary or more permanent basis, may be leading up to a knock down, drag out fight in Sacramento in the coming weeks.