Pass the bucks

It took many sleepless nights, a lot of back-bending and -scratching and whole lot of cutting, taxing and borrowing to get there, but California finally has a 2009-10 budget. There are still some wrinkles to iron out: If/when the expected $10 billion from the president’s stimulus package makes it here, the money the state borrows will be reduced by nearly $6 billion and the tax-rate hike will be cut in half. Also, part of the agreement includes a handful of future state ballot initiatives (including a proposal to increase the time period of the sales-tax increase by two years); a variety of economy-stimulating programs (such as giving $3,000 tax credits to small businesses for new employee hires) and a few state worker changes (two monthly furlough days, reduction in paid state holidays).

Action item Funds created/saved (through June 2010)

Sales tax: 1 percent increase, beginning April 1 $5.8 billion

Vehicle license fees: increase from .65 to 1.15 percent of vehicle value, beginning May 19 $1.5 billion

Income tax: .25 percent increase in tax rate and decrease in dependent tax credits (from $309 to $99), beginning 2009 tax year $3.2 billion

Education: spending cuts $5.2 billion

Higher education: 10 percent budget cuts $692 million

Income subsidies: no cost-of-living increases for welfare, SSI/SSP $674 million

Borrowing: combo of short-term notes and funds borrowed from lottery and other state special funds $6.3 billion

Source: Sacramento Bee