California Governor Jerry Brown vowed to hold the line on additional tax increases as long as the legislature constrains new spending programs after voters in the state approved raising levies on sales and income.
“The stack of possible spending bills is killing us,” Brown said on CNN’s “State of the Union” program. “Legislative ideas are endless and we’ll have to cut at least some of them down.”
Proposition 30, which won voter approval Nov. 6, raises the state’s sales tax a quarter percentage point, to 7.5 percent, and increases rates on income starting at $250,000. The increases are designed to raise an estimated $6 billion annually, and expire by 2018.
The referendum marks an acknowledgment by Americans that state and federal budget deficits can’t be closed with spending cuts alone, Brown said. As part of a deal to avert deep cuts to defense and domestic programs, President Barack Obama has demanded that federal income tax rates on the wealthy be allowed to rise, a position he says was endorsed by his re-election victory last week.
Without “balance” between spending cuts and tax increases “you run the difficulty that the whole country breaks down for lack of common commitment,” Brown said today.
© Copyright 2014 Bloomberg News. All rights reserved.