California

Agreement Reached on Early Budget Package

Joshua Fimbres

Governor Schwarzenegger and legislators of the State of California reached an agreement on an early budget package. The three parts of the agreement include trimming 1.1 billion dollars from the public transit system, tax incentives of 10,000 for first time home-buyers, and incentives for green-technology companies. These measures are intended to stimulate the real estate market in and a growing green sector in California. Legislators are trying to avoid more tax increases due to unpopularity among voters and thus are seeking to trim other services with the exception of education. The hope among lawmakers is that the economy will improve and increase the state’s tax revenue, thus preventing the need for more cuts.

• Early budget package: Compromise made for future budget that will be passed by state legislature
• Tax incentives: Credits that reduce taxes; provided by government to promote certain projects/activities
• Green Sector: Refers to all high-tech and environmentally sustainable businesses

• Arguments for: Tax credits for first time home buyers intends to provide incentives for possible consumers in real estate market. Tax credits for green technology businesses are meant to spur job growth in that growing sector. An 1.1 billion dollar cut from mass transit funds attempts to help avoid cutting the education budget.
• Arguments against: The projection does not assess all costs needed to balance budget and the state will eventually require a cut of education spending.

Additional Reading:

http://www.sacbee.com/2010/03/23/2626438/lawmakers-schwarzenegger-strike.html


http://www.latimes.com/news/local/la-me-budget23-2010mar23,0,933509.story