By Dan Walters
Published: Tuesday, Feb. 25, 2014 – 10:51 pm
Last Modified: Tuesday, Feb. 25, 2014 – 11:42 pm
Revenue volatility, an old issue, is getting new attention this year as Gov. Jerry Brown and legislative leaders pledge not to do what their predecessors often did – overspend windfall revenue.
“Boom and bust is our lot,” Brown told legislators in his State of the State address in January, urging them to follow the biblical injunction to save for leaner times.
Brown and legislators say they want a mandatory rainy-day fund that would absorb some windfall revenue and save it for periods of lower income.
However, while the notion has floated around the Capitol for decades and the state already has a weak system in place, it’s still not clear what, if anything, new and effective will be written into the state constitution.
Major Democratic constituencies, especially public employee unions, are leery of revenue diversions, seeing them as indirect limits on their agendas.
The other alternative to dealing with boom-and-bust revenue would be to overhaul the tax system, which is highly dependent on income taxes on the wealthy, to make it less volatile. But that would require raising middle-income taxes, and a blue-ribbon commission’s recommendation to that effect has been buried in the Capitol’s deepest hole.
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