Despite massive cuts signed into law in March and a wave of unexpected state revenue, California still needs to make up a budget shortfall of $10 billion, said Gov. Jerry Brown in a press conference Monday morning detailing his "May revise" of the state's financial situation. 

Gov. Jerry Brown (Creative Commons)

The state now has $6.6 billion in unexpencted tax revenue on its hands, which allowed Brown to ease up on his proposal to raise income taxes over the next five years. They will now be raised for four years, starting in 2012, if the budget proposal is passed. Other tax hike proposals, such as those for sale taxes and vehicle licencing fees, remain in place. The state budget deficit was originally projected to top $26 billion over two years. 

Brown is still pushing to put the tax extensions before a public vote. A staple of his 2010 campaign was that he would not raise taxes without voter approval. This has been the most difficult part of his term as governor because of Republican resistance. Brown said he has spoken to Republican lawmakers who do not support tax hikes but would like to see the proposal on a public ballot.

"If we don't have any tax extensions, we're going to have an $8 billion hole," Brown told reporters.

Brown has also said he has decided to spare so-called enterprise zones, one of the issues on which Republican state lawmakers have held out on in the budget battle. The governor plans to "reform," instead of eliminate the enterpise zones, which supporters claim foster economic development in "blighted" communities.

Brown continued to push for budgetary reform without the use of "gimmicks" such as state borrowing. "What I'm saying is, the wall of debt has to come down," he said.

The March cuts, $11.2 billion mainly to social services, had severe implications for the poor, the sick, the elderly and the mentally ill. "It's almost a miracle we got those cuts," Brown said.

Brown's determination to stick to his tax plan flies in the face of the "no-taxes" (all-cuts) budget proposal the Republican Assembly proposed last week.

From CBS/AP:

Instead, Assembly Republicans proposed deeper cuts on services to the poor, elderly and disabled. They want state workers to take another pay cut equal to 15 percent of their salaries. And they suggest raiding one-time funds intended for early childhood development and mental health.

“The budget approach that we outline today represents the common sense solutions that we believe can be embraced by Democrats and Republicans alike in enacting a reasonable no-tax increase, budget compromise,” Assembly Minority Leader Connie Conway wrote in a letter Thursday to Assembly Speaker John Perez.

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