LAO analyzes Govís budget proposal

By CMTA Staff

Capitol Update, Jan. 15, 2010 Share this on FacebookTweet thisEmail this to a friend

On Jan. 13th, the Legislative Analyst’s Office (LAO) released their analysis of the Governor’s 2010-11 budget. While calling the proposal reasonable under the dire circumstances of the state’s fiscal health, the LAO also called out the Governor’s plan to secure increased federal funds to avoid draconian cuts and revenue increases as overly optimistic.  In doing so, the LAO suggested that the proposed “Trigger List” of expenditure cuts and revenue increases needed if the federal funds don’t come through be seriously reviewed and considered as part of the budget proposal.
 
These “Trigger List” revenue raising options include, among other items, the delay of implementation of tax reforms approved in the February 2009 budget that included elective single sales factor, improvements related to the use and ability for businesses to effectively utilize the research and development tax credit and federal conformity to the treatment of a taxpayer’s net operating losses.  Delaying the implementation of these vital tax reforms could cause significant damage to California’s already eroding business climate.  California’s employers rely on predictability and certainty for planning purposes when making investment decisions.  Continuous delays in these much-needed stimulus reforms only serve to further erode confidence in the state’s ability to attract and retain good paying jobs.
 
The Governor and the state Legislature both touted the creation and protection of California jobs to be the most important component of their work this year.  We couldn’t agree more.  If we don’t provide California employers with the tools and resources to compete globally and to gainfully employ the people in this state, we are destined for ongoing budget deficits. CMTA implores them to make this a reality by rejecting proposals that damage California’s future and instead focus on meaningful reforms to restore the state’s fiscal health.
 
For a full review of the LAO’s analysis of the Governor’s 2010-11 budget proposal, please go to: www.lao.ca.gov/reports/2010/bud/budget_overview/bud_overview_011210.pdf

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