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California governor, lawmakers agree how to close deficit


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2020 Jun 22, 5:09pm   716 views  10 comments

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SACRAMENTO, Calif. (AP) — California will make up its estimated $54.3 billion budget deficit in part by delaying payments to public schools and imposing pay cuts on state workers, according to an agreement announced Monday by Gov. Gavin Newsom and legislative leaders.

The agreement avoids billions of dollars in permanent cuts to public schools and health care programs, including proposals from Newsom that would have made fewer low-income older adults eligible for government funded health insurance and would have eliminated programs aimed at keeping people out of nursing homes where the coronavirus has spread with deadly consequences.

Instead, the agreement would make up the deficit in part by imposing $2.8 billion in pay cuts to state workers and delaying roughly $12 billion in payments to public schools to future years. The rest would come from borrowing from some restricted funds that must be paid back, spending cuts to other programs and temporary tax increases on businesses that would bring in $4.4 billion in new revenue.

Some of those cuts and delayed payments would be eliminated if the federal government sends the state more aid by October.

https://www.sfgate.com/news/article/California-governor-lawmakers-agree-how-to-close-15357413.php

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1   WookieMan   2020 Jun 22, 5:23pm  

This is just the tip of the iceberg. We'll end up being fine, but I'd be watching my back if I was a public sector employee in any state. It's the quickest way to slash a budget without tossing/reducing pensions, which is probably coming as well in most states if they can.

Fortunately property values seem level so far, which is generally the bigger(est) of revenue streams. The sales tax states got demolished and that money is gone. I don't really know how they make up the shortfall of 2-3 months of 60-70% less revenue.
2   Ceffer   2020 Jun 22, 5:29pm  

The deficit was 54 billion just a month into the lockdown, after a 25 plus billion surplus was eliminated and the 54 billion acquired. It has to be a lot higher now. So he's talking about making up for the old deficit, not the newly acquired deficits.
3   WookieMan   2020 Jun 22, 5:50pm  

TrumpingTits says
Won't work at the city level, tho. Many cities could shut EVERYTHING down and it will only make a small dent in their liabilities.

This is true. Chicago is probably fucked, I know that. Amusement tax is 9%, plus any sales tax in the venues. 2 baseball teams, hockey and basketball all shut down. No concerts. You're talking 60k people a night during the summer paying for a ticket to an event in Chicago at probably $50 on average. Chicago is looking at $300M from amusement tax loss alone. Sales tax similar. This is just from the sports teams. Close to $1B lost and can never come back.

Throw in restaurants and auxiliary businesses that benefit (gas stations, etc) and the loss is staggering for sales tax localities. It's going to be a blood bath in many areas.
4   Booger   2020 Jun 22, 5:58pm  

I would have expected hefty tax increases instead.
5   RWSGFY   2020 Jun 22, 6:41pm  

Booger says
I would have expected hefty tax increases instead.


Oh, it's coming, make no mistake. They can't do it right now because it needs to be on the ballot, but it's coming.
6   rocketjoe79   2020 Jun 23, 12:07am  

I was hoping not to have to move To Tennessee. Or Texas. Or Florida. Are there any parts of Nevada that aren't barren and don't suffer extreme temperatures?.
7   MisdemeanorRebel   2020 Jun 23, 12:14am  

rocketjoe79 says
I was hoping not to have to move To Tennessee. Or Texas. Or Florida. Are there any parts of Nevada that aren't barren and don't suffer extreme temperatures?.


Almost the entire world doesn't experience low humidity, 300+ sunny days, and 60-80F Temperatures mostly year round.

Tacitus said the average Germans could beat the average Romans because Italy was too moderate in climate, with too many "Enervating Luxuries", so better the dark forests and weak sun of Germany to harden hearts and encourage stoicism and toughness, but also individualism and moodiness. The Roman advantage was group discipline, and if it failed, they would be lost.

"Tis cold here, Quntillius Californatus. Such temperatures we have not in Redondotum!"
8   Misc   2020 Jun 23, 11:24am  

They said "TEMPORARY" tax increases on business. - HAHAHAAHAHAHA

This budget deficit is only based on decreased tax "income". Doesn't even include the roughly $2 billion per week in extra outflows for unemployment payments that California is gonna be borrowing from the Feds.

I wonder if those "Restricted Funds" they are going to be borrowing from are California's pension monies.
9   SunnyvaleCA   2020 Jun 23, 11:45am  

FuckCCP89 says
Booger says
I would have expected hefty tax increases instead.
Oh, it's coming, make no mistake. They can't do it right now because it needs to be on the ballot, but it's coming.
With the highest or among the highest sales tax and income tax in the nation, California will have to cancel all or part of Prop 13 to unlock a huge revenue stream on real estate. Funny thing was that for the last few years I thought I was told CA is running a tax surplus that was being stocked away for a rainy day.
10   mell   2020 Jun 23, 12:16pm  

SunnyvaleCA says
FuckCCP89 says
Booger says
I would have expected hefty tax increases instead.
Oh, it's coming, make no mistake. They can't do it right now because it needs to be on the ballot, but it's coming.
With the highest or among the highest sales tax and income tax in the nation, California will have to cancel all or part of Prop 13 to unlock a huge revenue stream on real estate. Funny thing was that for the last few years I thought I was told CA is running a tax surplus that was being stocked away for a rainy day.


yep the "rainy day" fund which was already partly a scam and yet Brown got a lot of flack form the leftoids for trying to stash away some money. Leftoids will ruin CA and even the public employees will go down with the ship. financially Brown was almost a right-winger/nazi for the regressive leftoid of today.

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