California Tax Shortfall Causes Concern
Joshua Fimbres
This month saw a shortfall in the amount of tax revenue collected. Governor Schwarzenegger had projected $10.2 billion in income tax revenue in the month of April, while the state had in reality collected $5.2 billion. The impact of the shortfall will play out in future budget proposals as the state of California is forced to grapple with enormous unfunded liabilities such as growing state pensions and backlash received from education cuts by students. While under normal circumstances citizens may celebrate paying less in taxes this year’s decrease in taxes received is a direct result of an ailing economy.
- Loss of Tax income could: Force government to reduce long term spending
- Immediate result of loss of taxes: Could force more cuts across the board. State may cut education budget again. State will not be able to bridge deficit from government pensions
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