Surprise, surprise: California’s budget, assembled with smoke, mirrors, and lots of hope is already in trouble. Analysts already see a $1 billion deficit and think that $3 billion is a more likely number…and we’re still in October. The fiscal year has over eight months to go. Given the probable lowering of income tax collections next year things could get ugly in Sacramento again.
Republicans still pledge no new taxes while State Senate President Pro Tem Don Perata wants to tax goods and services that haven’t been taxed in the past. Since tax increases require a 2/3 vote of the legislature (meaning that Republican votes are required) don’t expect any substantial tax increases.
Given the rhetoric you should also not expect any meaningful legislation until the very last minute.
News Stories: New York Times, Forbes (AP), Los Angeles Times