California Reaches Budget Deal Including New Taxes And Fees

Jerry BrownCalifornia Governor Jerry Brown

California Governor Jerry Brown and Democratic legislators reached a deal to close an estimated $15 billion deficit last night, including billions in new taxes and fees, and even more in spending cuts.Likely to pass as soon as today, The Los Angeles Times reported that among the changes, the new budget would force online retailers like Amazon to collect sales tax, and the DMV will increase car registration fees by $12.

Combined with spending cuts passed earlier this year, the California court system will lose $350 in funding, and funding for state universities will be slashed by $650 million. 

The budget relies on $4 billion in tax revenues that Brown admits may not materialise, which would force further steep cuts to education — including the shortening of the school year by seven days.

The plan has drawn criticism from Republicans for relying on billions in “magically appearing” revenue instead of more spending cuts.

The budget also relies on questionable accounting practices, including postponing billions in school payments until the next fiscal year, according to The Los Angeles Times.

Brown though has insisted his budget is “real,” and consistent with his campaign promise not to push the state further into debt.

The governor vetoed a different budget passed by the legislature on June 15 after State Comptroller John Chiang proclaimed it unbalanced. Legislators have not been paid since then, under a new law docking their salary until they agree on a balanced budget.

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