The Sacramento Bee: Dan Walters: Wrangling over new state taxes

By Dan Walters
dwalters@sacbee.com
November 22, 2015

• California continues to see strong revenue gains
• Jerry Brown wants to build rainy-day reserves
• Other Democrats have spending plans in mind

As the Great Recession gripped California, state revenues plummeted by 20 percent and Capitol politicians and major stakeholders battled over which programs would take the hits.

During this decade, however, a slow recovery from recession and a temporary hike in taxes approved by voters in 2012 have boosted general fund revenues from scarcely $80 billion when Jerry Brown began his second governorship in 2011 to an estimated $116 billion today.

The politics of penury were succeeded by the politics of prosperity, and in many respects they proved to be equally daunting.

At Brown’s insistence – and constitutional mandates – the bulk of the new money flowed to K-12 schools, to paying down debts and to reserves against a future downturn.

Advocates of other major budget sectors, especially health and welfare services for the poor, the elderly and the disabled, felt left out.

In the absence of another major economic turndown – which history indicates may be overdue – the flow of taxes will continue to be strong, a new report from the Legislature’s budget analyst concludes.

Legislative Analyst Mac Taylor sees revenues running about $3 billion above estimates during the current fiscal year to reach $116.3 billion, and rising to $123 billion in 2016-17 and $131.3 billion by Brown’s final budget, 2018-19. And that’s assuming that voters don’t extend the temporary taxes, an issue likely to be on the 2016 ballot.

The Capitol’s politicians already are beginning to wrangle over how the additional money will be spent.

To read expanded column, click here.

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