Congratulations to California: State to Pass Budget, Close $9.6B Deficit, Without Tax Hikes

Congratulations to all California legislators willing to tell governor Jerry Brown where to stuff it. Without needing republican votes, California set to pass budget, close $9.6B deficit

California lawmakers and Gov. Jerry Brown are set to achieve something rarely accomplished in California -- getting a budget signed into law by the July 1 start of the fiscal year.

Both houses of the Legislature have scheduled late afternoon sessions Tuesday to vote on a Democratic budget that can be passed with a simple majority vote. That means no Republican support is needed.

Democratic lawmakers and the governor crafted the plan after Brown vetoed a budget approved on the Legislature's constitutional deadline, June 15. The state controller determined that plan was not balanced and used the provisions of a recent ballot initiative to halt lawmakers' pay.

This plan relies on spending cuts, a projected $4 billion rise in tax revenue and fee increases to close a $9.6 billion deficit.

Balanced Budget Mirage

Bear in mind this so-called "balance budget" is a mirage. Tax revenue is not going to be sustainable.

When this plan fails, and it will fail (but only after it passes), Republicans can stand firm again and demand more cuts.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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