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Governor Jerry Brown is pushing tax cuts and four-day work weeks as part of his strategy to lower the state's staggering $16 billion deficit.
LOS ANGELES — Jerry Brown, the Governor of California, announced a plan Monday to lower the state's staggering $16 billion deficit, proposing $8.3 billion in cuts to welfare and medical care and four-day workweeks for government employees, NBC News' Southern California affiliate reported.
"I am a buoyant optimist," Brown said at a news conference Monday morning in Sacramento, "but this is the best I can do" about the deficit, MSNBC reported.
The California governor had said in January that the deficit was $9.2 million, but the state has spent more than it had planned, tax revenues are coming in lower than expected, and both courts and the federal government have rejected several of Brown's spending cuts, the Los Angeles Times reported.
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The deadline for the passage of a new fiscal plan is tomorrow, June 15, and Governor Brown is scrambling to get support for his new initiatives.
“I said in the beginning when I ran for this job, that it’s taken a long time, nearly a decade, to get into this mess,” Brown told reporters, according to Bloomberg. “We’re not going to get out of it in a year.”
California's economy is the largest in the United States, and would rank ninth in the world if the state were a country, Reuters reported. For years, its tax system — which limits property tax increases by law and requires voter initiatives or a two-thirds vote of the legislature to implement tax hikes of any kind — has caused the state to struggle with its budget.
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Currently, the highest earners in California pay 9.3 percent of their income in taxes. Brown’s new plan, if approved by voters, would create three new marginal tax rates: 10.3 percent, 11.3 percent, and 12.3 percent, according to NBC News.
Brown's plan would also temporarily raise California's sales tax to 7.5 percent from 7.25 percent, and push the tax rate for incomes of $1 million and above to 13.3 percent, Reuters reported. The measure would raise $9 billion by the next fiscal year, according to Reuters.
Brown said that if voters do not approve his tax initiatives at the ballots next November, cuts to social services, state employee compensation and other expenditures would be large, NBC News reported.
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"I can't convey how difficult it is to make the cuts we are facing," Assemblyman Roger Dickinson said in an interview with NBC station KCRA of Sacramento. "This is a very, very serious situation that can't be solved simply by cuts. We've cut the state general fund budget by about 20 percent over the last three years, so it's not a matter of continuing to cut. We're beyond being into the bone at this point."