California’s “Balanced” Budget: It’s Not Over Yet, Really.
The State Legislature passed a majority vote budget this past Tuesday, lacking the recommended reforms in spending caps and pension sought by the business community, but without the tax extensions on sales or income either. The final bill signed by the Governor, SB 87, is an all-cuts budget. One dark spot is a virtual $48 million tax increase levied on Orange County, seemingly as a result of the negotiations.
The additional revenue will be obtained by providing to the state an increased percentage of the county’s vehicle license fee. While voters mandated the Legislature to pass a balanced budget on time and without tax increases, they once again found an opportunity to pass the buck to the local level.
The Governor also signed bills that would eliminate redevelopment agencies, but seems to have preserved enterprise zones, the one economic incentive offered in this state. With the budget relying heavily on projected revenue increases, it is unclear at this time whether or not the budget is actually balanced, and law suits are expected to result. It’s not over. For more information contact Kate Klimow, Vice President of Government Affairs.