By Dan Walters
Published: Thursday, Nov. 8, 2012 – 12:00 am | Page 9A
Last Modified: Thursday, Nov. 8, 2012 – 7:08 am
Democrats won it all in California this week – prevailing on new taxes and other major ballot measures and apparently achieving supermajorities in both legislative houses and, at least on paper, a free hand to do whatever they wish on anything.
The reality, however, is somewhat more nuanced.
Yes, voters passed Proposition 30, Gov. Jerry Brown’s sales and income tax increase, and he hailed it as “a vote of confidence” that the chronically imbalanced state budget will finally become deficit-free.
However, it’s uncertain that Proposition 30 will generate as much money as the 2012-13 budget assumes, and even if it does, other budget holes are emerging.
Furthermore, the new taxes are temporary, while much of the spending they finance is permanent, and the measure makes California even more dependent on a few high-income taxpayers, which makes revenues even more volatile.
While praising Proposition 30′s effect on the budget, the Standard & Poor’s credit rating house warned about volatility and potential problems when the taxes expire – just before Brown retires if he wins another term.
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