Sep 16, 2008 7:03 pm US/Pacific
California Legislature's Budget At A Glance
SACRAMENTO (AP) ―
Here's a look at the spending plan the California Assembly and Senate sent to the governor on Tuesday. It would plug a $15.2 billion deficit. Key elements of the budget would:
_ Cut $7.1 billion in state spending, including reductions in public transit and human service programs; includes lower-than-projected education funding, although schools will be fully funded under Proposition 98's minimum funding guarantee.
_ Collect $2.3 billion through "accelerations" in revenue by requiring corporations and upper-income taxpayers to pay 30 percent of their estimated taxes in each of the first two quarters of the fiscal year instead of 25 percent.
_ Collect $1.6 billion through a 10 percent increase in state income tax withholdings.
_ Collect $1.9 billion by adopting a two-year temporary suspension on deductions for business losses, known as net operating losses, and limiting other incentive credits.
_ Close the infamous "yacht tax" loophole that allows people to avoid paying state sales tax on boats, RVs, airplanes and other luxury goods if they take possession out of state and keep the items there for more than 90 days; estimated to raise $21 million annually.
_ Borrow against future lottery revenue to secure $10 billion over the next two fiscal years, starting in July 2009. The money would be deposited into a new fund dedicated to retiring debt. Prize payouts would be increased, but no new games or technologies are envisioned.
_ Increases the state's rainy day fund to 12.5 percent of the general fund budget, as Schwarzenegger wanted. Each year, 3 percent of general fund revenue will be dedicated to the fund until it hits the limit.
_ Does not specify that the rainy day fund can be tapped only during a fiscal emergency, as Schwarzenegger wanted. Democrats rejected this proposal, seeking more flexibility to draw from the fund.
_ Grant the governor authority to cut up to 7 percent from state operations when revenues fall below expectations. The governor would not have the ability to cut from the largest areas of the budget education and health and human services.
_ Seek voter approval to change the rainy day formula and lottery securitization plan.
(© 2009 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)
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