california predicts $1bn budget surplus
by matthew garrahan in los angeles
the state was hit hard by the financial crisis, with the rate of mortgage foreclosures and unemployment much higher than the national average. Regular budget deficits forced the state to slash public services and two years ago it even had to offer ious to its creditors in lieu of cash.
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but jobs growth in the golden state, an economy larger than those of india or russia, has outpaced the national trend in the us in recent months. California’s legislative analyst’s office is projecting a $1bn budget surplus by the 2014-2015 fiscal year, as $6bn of new tax revenue is due to flood into state coffers after voters passed a staggered tax increase on individuals and families earning more than $250,000 and $500,000 a year.
The lao said years of spending cuts, the new taxes and an economic recovery had “combined to bring california to a promising moment: The possible end of a decade of acute state budget challenges”.
The passage of proposition 30, which increases the top rates of tax with new money ringfenced for the state’s ailing education system, was a big victory for jerry brown, california’s governor. Mr brown has urged barack obama, president, to consider the state’s election result – and the willingness of california voters to sanction new taxes on the wealthy – in his negotiations with republican congressional leaders over the so-called fiscal cliff.
But critics of proposition 30 say it could prove harmful to california and should not be replicated at the national level. [ because it works. Just like romney's hc plan that insured almost everyone in the state. Aka...romney/obamacare.]