Wednesday, May 20, 2009

the tax revolt begins

California voters send pols back to drawing board on budget
Wednesday, May 20, 2009, 6:06am PDT | Silicon Valley / San Jose Business Journal
There was little support for a series of ballot questions Tuesday aimed at fixing the California budget deficit.

Proposition 1A, which would have capped spending while extending a sales tax increase and boosting a rainy day fund, was rejected by about two-thirds of the voters who cast ballots.

Sent to a defeat by a slightly smaller majority were measures to provide $9.3 billion in supplemental payments for local school districts and colleges, borrow $5 billion against future lottery revenue and shift revenue earmarked for mental-health and children's programs to the general fund.

The only proposition to pass, by about 3-to-1 margin, bars pay increases for elected state officials during budget deficits.

The failure of the measures pegs the upcoming fiscal year's deficit at $21 billion, up from the previous projection of about $15 billion.

Gov. Arnold Schwarzenegger said in a statement after the polls closed, "Tonight we have heard from the voters and I respect the will of the people who are frustrated with the dysfunction in our budget system. Now we must move forward from this point to begin to address our fiscal crisis with constructive solutions."

The governor is calling for an increase of $2.3 billion in budget cuts for education on top of $3 billion in cuts that were already planned. He has also called for a $400 million cut in prison costs by shifting inmates to local and federal authorities.

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