Monday, January 9, 2012
California Governor Jerry Brown's proposed sales and income tax initiative might not bring in as much money as he hopes it will.
An analysis from the non-partisan Legislative Analyst's Office projects the measure would bring in two billion dollars a year less than the governor projects in his recent budget proposal.
H.D. Palmer with Brown's Department of Finance said the two agencies' numbers aren't far apart.
"The principal difference in between our forecast and the analyst's is the fact that we're seeing higher capital gains and higher incomes driving revenues a little bit more strongly than the legislative analyst's forecast does," said Palmer.
Another difference is that the governor assumes Congress doesn't extend the Bush tax cuts - so wealthy taxpayers might shift some of their incomes from next year to this year to take advantage of the expiring tax rates.
But if the LAO's projections prove more accurate, that could require deeper cuts to balance the budget than Democrats and the governor want.