Posted by Tina
Highlights of Calif. budget proposal AP San Jose Mercury News
The buidget proposal to be voted on today is projected to raise up to $14.4 billion through June 2010 by imposing a variety of temporary taxes. Higher taxes would be in effect for two years, however, Republicans would allow taxes to remain for two additional years if voters approve a state spending cap during a special election in May.
** Here are the specific taxes: Increases the state sales tax by 1 cent on the dollar, generating $5.8 billion through the next fiscal year. *** Raises the fee for licensing vehicles to 1.15 percent of market value, up from the current .65 percent. The move is projected to generate $1.5 billion. A portion of the fee will be dedicated to local law enforcement. *** Adds a 12-cent gasoline tax, raising $2 billion. *** Imposes a one-time, 5 percent surcharge on people who owe personal income tax at the end of 2009 to generate $3.2 billion. If the state receives more than expected from the federal government, the surcharge would be reduced to 2.5 percent. *** Reduces the amount taxpayers can claim on a dependent care credit to the federal level of $100 instead of $300, adding $1.4 billion. *** Redirects $201.6 million of tribal gambling revenue from the state Department of Transportation to the general fund over the two-year period. The money is intended to offset the effects of increased traffic around Indian casinos. *** Cuts: Reduces state general fund spending by $15.1 billion through the end of June 2010 by forcing education and social service programs to absorb much of the pain. Among other cuts, the budget proposal: Reduces education spending by $8.6 billion over two years, likely forcing schools to lay off teachers, slash salaries and postpone spending on construction and textbook purchases. The proposal also would give districts greater flexibility in spending money that is normally dedicated to specific programs. *** Imposes a 10 percent across-the-board cut to the University of California and California State University systems, saving $264.4 million. *** Continues a two-day-a-month furlough for 238,000 state workers, trims overtime pay and eliminates Lincoln’s Birthday and Columbus Day as paid state holidays, saving $1.4 billion. *** Cuts the medical budget for the state prison system by 10 percent, saving $181 million. *** Eliminates annual cost-of-living increases for recipients of the state’s welfare-to-work program, known as CalWORKS, to save $79 million. *** Eliminates the state and federal cost-of-living increase for seniors and the disabled who are receiving Supplemental Security Income/State Supplementary Payment, saving $594.1 million. *** Depending on whether the federal government provides additional aid, the budget compromise would make further reductions to the courts; Medi-Cal, the state’s health insurance program for the poor; CalWORKS; in-home support for seniors; and other social service programs by $948 million. *** Borrowing: Approves a $5 billion plan to borrow against the value of the lottery’s future revenue. Voters must approve changes to the lottery to make it more marketable in the hope that it will bring in more money, and then the state would have to entice investors to buy the bonds. **