California budget deal: New revenue

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The California budget deal, crafted by California Governor Arnold Schwarzenegger's and the California state legislature is the proposed solution to the California state budget crisis.

The final budget agreement is expected to raise $12.5 billion in new revenues through June 30, 2010.

If voters approve proposed changes to the state's budget reserve and limits on state spending, new taxes would be in effect for three to four years. However, if they reject the spending cap, the new taxes would be in effect for two years.

California Spending, Years in Comparison
Revenue raised in 08-09 Revenue raised in 09-10 Years in effect
(Expiration date if not passed)
Increase state sales tax by 1% $1.203 billion $4.553 billion April 1, 2009-June 30, 2012
(June 30, 2011)
Increase Vehicle License Fee from 0.65% to 1.15%* $345.9 million $1.692 billion May 19, 2009-June 30, 2013
(June 30, 2011)
Increase all income tax rates by 0.25%** - $3.658 billion Tax Years 2009-2012
(TY2009-2010)
Reduce size of dependent credit of personal income taxpayers to level of personal credit - $1.440 billion Tax Years 2009-2012
(TY2009-2010)

*This does not include commercial vehicles. The revenue from this would be used for local law enforcement programs.
**If the state receives a certain amount of federal funds by the end of 2009-2010, the rate is cut to 0.125%.

References