CA unhealthy finances can lead to another tax increase

The perfect storm of economic, fiscal and political tendencies is to face the already deficit deficit state budgetLeading public unions of employees and other interest rates dependent on Sacramento’s money to explore the huge tax increases.

The budget has what fiscal authorities call “structural deficit“Means its income system, dominated by personal income taxesHe cannot generate enough income to fully fund all services and programs in the current legislation.

Chronic shortage projections range from $ 10 billion a year to $ 30 billion. Last fall, the legislative analyzer’s office calculated that country Costs increase by about 6% annually As the revenue increased by only 4%.

The current budget, entered into force in JuneThere was a deficit of $ 12 billion, which was closed by registration in the state’s emergency reserves, borrowing from special funds, giving way to some payments and accepts some accounting tricks. For example, the budget eliminates payments to reduce the ever -increasing non -financed pension health care obligations that reached $ 91.5 billionUp to $ 6.3 billion a year earlier, controller Malia Cohen recently revealed.

Deficit persistence is one of the factors that nourish pre -coating to increase tax from some kind, which should probably be ratified by voters.

Another is the reduction of federal assistance to President Donald Trump and Congress. Federal funds are more than a quarter of California State Budget in California in California and The abbreviations are most hitting programs for health and well -beingLike Medi-Cal. Many seek to suckhara for money to compensate for federal reductions.

Finally, Surah for the incomes of the most possible families in California, approved by voters in 2012 to deal with a more budget deficit, had to last only a few years, but a a 2016. Voting measure It expanded it to 2030, especially its supporters – the unions of public officials – plan to seek either other extension or permanent status.

The Franchise City Council says Surtax revenue has focused on more than $ 16 billion in 2021. Thank you to the strange Covid-19 pandemic economy, they returned to a more normal $ 9-10 billion a year.

The Californians are already carrying one of the highest tax weights in the country. Hub of portfolio has calculated that major state and local taxes in California are Fourth highest of any country with 11% total tax burden.

So, what kind of tax increase can be offered? There are not many options.

Another increase in income tax would be unlikely, since maintaining high-income taxpayers is already certain that it will be on the newsletter, probably in 2028, an increase in sales tax, which is already moving about 10%, would hit the low-income families.

This leaves corporate income taxes as the most likely goal of source that the California Budget and Policy Center, Left-In Study, Non-Profit Purpose, and has made up Years. Referring to a reduction in federal assistance and reducing federal taxes on corporations and wealthy taxpayers, the organization is going to close what he views as doors in the corporate tax systemS

“Given the Immense Harms That will be Done as a Result of the Recently Enactly enactly Budget Bill, State Leaders Must Develop Plans to Significante State Revenues… in Order to Balance That Are VulneRerent to Serious Harms from the Federal Cuts to Health Care, Food Assistance, and Other Federal Policies, “The Organization Declares in A Composure to federal discountsS

It is clear that something has to give. California may not continue to increase budget deficits, as the decline in federal aid combines already uncertain state finances.