Treasurer Bill Lockyer and Department of Finance Director Mike Genest announced today that California will sustain $948 million in spending cuts and $1.8 billion in higher taxes because the state will not receive enough federal budget relief to avoid those measures.
As part of the February budget package, state lawmakers and the governor created a system under which Mr. Lockyer and Mr. Genest were asked to determine, by April 1, whether California will receive $10 billion in federal budgetary aid through June 2010.
Receipt of at least $10 billion would be a "trigger" to cancel spending cuts and some of the personal income tax increase approved as part of the budget package.
The Sacramento Bee reported: "Genest's office issued a statement this morning saying that he and Lockyer believe California will receive only $8.17 billion that qualifies under the criteria in the budget agreement. … Lockyer, in a letter to Schwarzenegger, concurred that the $10 billion threshold would not be reached." (Source: The Sacramento Bee, March 27.)
Cal-Taxletter, March 27, 2009
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