This story was reported for the San Diego News Network on April 15, 2010.
It’s a study-heavy California Budget Crisis Diaries entry. First there are studies from the California Budget Project, then there’s a study by The Associated Press — both are sure to make you ponder the $20 billion-plus budget hole further.
Let’s start with the study on taxes for your April 15th round-up.
Poor pay more in taxes: Are Californians who are earning the least amount of income paying more in taxes? Apparently.
According to an article by San Bernardino’s The Sun, a California Budget Project report shows California’s poorest pay more than California’s richest.
“The state’s decision to increase tax liability has especially hit hardest at the poorest 20 percent of California families.
According to the report, the dependent tax credit — the tax credit claimed by families with children or other dependents — was cut last year from $309 to $98, which in turn lowered the income level at which families with children begin to pay income taxes.
‘In 2009, for example, a family of four with two children began to pay income taxes when their income reached $36,325. In 2008, that threshold was $51,335,’ according to the report.”
Need more examples? The Sun reporter goes on:
“The CPB report said the state’s poorest non-elderly families, with an average income of $13,200, spent 11.1 percent of their income on state sales, income, excise and corporate taxes.
The state’s wealthiest 1 percent of the population, with an average income of $2.2 million, paid 7.8 percent of their income on state taxes, according to CBP, which is a nonprofit seeking fiscal reforms to benefit low- and moderate-income Californians.”
Cuts = costs: In another California Budget Project study, researchers say if lawmakers choose to cut funding from California In-Home State Services program, it could cost the state some bank.
As reported by Lake County News:
“Proposed cuts in the governor’s budget have raised concerns about the possible impacts on caregivers and recipients in the In-Home Supportive Services (IHSS) program.
As the state’s fiscal crisis has deepened over the last several years, social services programs — including IHSS — have been suggested for cuts by Gov. Arnold Schwarzenegger, and this year is no different.
In his January budget, Schwarzenegger proposed capping the state’s share of IHSS workers’ compensation, which the California Budget Project estimated could cost the state’s 370,000 IHSS workers $1.2 billion between this coming June and June 2011.”
And if experts say California will stay in its fiscal hole for at least another couple of years…what will happen to the services? Lake County Social Services director Carol Huchingson tells the newspaper, it’s making her question when the cuts will end.
“Still, the state’s fiscal crisis adds to the uncertainty. ‘I do question at what point does the whole thing just go over the top because the state has no money,’ said Huchingson, who added that she doesn’t believe that the wage cuts will be upheld this year.”
Costly sell-offs: Gov. Arnold Schwarzenegger’s plan to sell two dozen state office buildings would cost California taxpayers billions of dollars in rent in the years ahead, far more than the state stands to make from the sale, according to financial documents analyzed by The Associated Press.
If all buildings sell at the asking price, administration officials projected the state would net about $660 million after roughly $1.1 billion in construction bonds are paid off.
The state would then rent space in the buildings from the new owners for 20 years. Over that period, it would pay $5.2 billion in rent, according to documents prepared for potential buyers.
The costs associated with selling off government properties are detailed in investment packets created by the company the state hired to market the buildings, CB Richard Ellis. The Associated Press requested and obtained the documents through the state, then compiled and analyzed the financial information supplied for each building.
Under terms of the proposed leases, the state would have to pay a monthly fee for nearly 3,500 parking spaces it now controls, adding $138 million to the state’s costs over the next two decades. California taxpayers may even cover increases in property tax assessments once the buildings are sold.
The plan to sell state office buildings was promoted by Schwarzenegger during last summer’s drawn-out negotiations to close California’s budget deficit. The governor sold the idea as a moneymaker for the state.
Final leg of March: The final mile of March for California will conclude on the steps of the state capitol on April 21. The march, which began in San Diego six weeks ago and picked up supporters along the way, is a statement from education activists asking lawmakers to end the cuts. City College professor Jim Miller blogged extensively for SDNN about the march, check it out here.
Associated Press writer Judy Lin contributed to this report. Hoa Quach is the political editor for the San Diego News Network.