Statement: Jean Ross on Tax Deal Announced by Governor Brown
"The California Budget Project strongly opposes the last-minute tax deal announced by the Governor today. This agreement not only makes major changes to the state's tax system in the final hours of the legislative session without an opportunity for public review and comment, but it also provides costly new tax breaks at a time when the Governor's Department of Finance projects budget deficits into the foreseeable future.
"The Governor's proposal suffers from what the California State Senate's Office of Oversight and Outcomes called the 'blank check effect,' in a report issued this morning. This report noted: 'Tax expenditures, unlike direct spending, can balloon far beyond initial expectations with little notice or control.' While recent corporate income tax collections suggest that the cost of elective single sales factor apportionment, also enacted as part of a last-minute deal, will far exceed the initial February 2009 estimates, the proposal announced today replaces one flawed policy with another. Although the proposed tax deal strives for revenue neutrality, last-minute drafting and the lack of public review could very well result in policies that will cost the state far more than initial estimates suggest.
"The fact is, California cannot afford the kind of 'no strings attached' policy that this tax deal represents. The proposal announced today provides costly tax breaks to businesses at a time when corporate profits are at record levels. Moreover, it does so without requiring recipients of the tax cuts to create a single new job or invest even one additional dollar in California."
Friday, September 9, 2011
Governor Brown arranges massive tax cuts to corporations, no job growth
Gov. Brown arranges last minute tax cuts mostly for corporations. Really Governor Brown ? That is the budget problem? I thought the problems included cutting 4.5 billion from K-12 schools, laying off tens of thousands of teachers, forcing cities and counties to lay off police, and firefighters. Underfunding local services so that parks are closed and garbage not picked up.
One Response of the California Budget Project
The Sacramento Bee:
In an eleventh-hour bid to claim victory on job creation, Gov. Jerry Brown will work today to push a corporate tax deal through the state Senate on the final day of this year's legislative session.
Brown secured passage of the plan in the Assembly on Thursday, but lacks Republican support in the Senate.
The Democratic governor's revised tax plan raises about $1 billion in corporate taxes, mostly from out-of-state companies, and redirects that money toward tax breaks for California businesses and individuals….
The Democratic governor's revised tax plan raises about $1 billion in corporate taxes, mostly from out-of-state companies, and redirects that money toward tax breaks for California businesses and individuals.
These kinds of last minute tax deals in the past have resulted in billions of hidden tax cuts for specific industries and the rich.