When Jerry Brown returned to the governor’s office on Jan. 3 he faced the daunting task of trying to balance the Golden State’s deficit-riddled budget.  A week into his third term Gov. Brown released his 2011-2012 budget proposal that calls for $12.5 billion in budget cuts.  The proposed cuts would halve the state’s current deficit.  In addition to the cuts, the proposal also calls for adding $12 billion in revenue, mainly through temporary tax increases.

The budget proposal means sacrifice in nearly every service area with the exception of K-12 education whose funding remains untouched.  While the Legislative Analyst’s Office calls Brown’s proposal a “good start” there are still some issues that need to be worked out.

One of those issues is voter-mandated temporary tax increases, a key component of the proposed budget.  The tax increases are actually an extension of four temporary tax increases implemented in February 2009.  Brown has called for a special election in June to deal with state funding.  The 1% increase in the state sales tax and the 0.5% increase in the vehicle license fee are two of the temporary tax increase extensions proposed for the June special election.  The LAO’s budget overview states these temporary tax increases could be in effect for up to five years.

The notion of asking voters to approve temporary tax increases is not unheard of.  In a May 2009 statewide special election voters defeated Proposition 1A which would have extended the temporary increases for one or two more years.  The vote was not even close, with 65% voting against the proposition. 

The electorate’s attitude may have changed since the spring of 2009, but if it hasn’t, the governor will be forced to go back to the drawing board.  According to the LAO’s report, about half of Brown’s proposed budget solutions (approximately $12 billion) are dependent on voter approval in the special election.  Thus far Brown has not released any information on how he plans to come up with $12 billion in revenue should the proposal fail to garner ample voter support.

 

Reach Christine Detz here