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2012-13 Budget: May Revision
Governor Jerry Brown released his May Revision to the 2012-2013 State Budget today estimating that the current budget deficit has now grown to $15.7 billion. His May Budget includes additional spending cuts to health and welfare programs, higher education, as well as a 5 percent furlough for state workers totaling $8.3 billion.The May Revision assumes the passage of the Governor's tax initiative on the November ballot. This measure temporarily increases the personal income tax on the state's wealthiest taxpayers for seven years and increases the sales tax by 1/4 percent for four years. The measure will generate $8.5 billion through the budget year and will guarantee these new revenues to schools and some to public safety programs. If the tax initiative fails on the November ballot, trigger cuts would be enacted as follows: $5.5 billion cut to K-12; $250 million cut to UC and CSU; and the state would reduce the number of public safety officers in Parks, Forestry and Fire protection, and Fish and Game. The Department of Justice’s law enforcement programs would also be reduced.
The Governor's budget states that California and national economies are recovering at a modest pace. Labor markets made higher gains in the latter half of 2011, but growth moderated in the early months of 2012. Gross Domestic Product growth is projected at a higher level for 2012. The biggest assumption is new revenues from the public offering of Facebook stock, which is estimated to be one of the largest initial offerings in U.S. history. With many of the initial investors residing in California, the offering is projected to have a significant positive impact on CA personal income, increasing it by 1.7 percent in the later part of the year.
Attached is a copy of the Governor's May Revision which includes details on the additional cuts and changes to the Governor's January 2012-2013 State Budget.