The budget projections offered by the Legislative Analyst last week could throw a monkey wrench into the plans of those who are seeking tax increases on the 2014 ballot.
The LAO projected a budget surplus of $5.6 billion dollars for the budget year ending in 2015 scaling up to $10 billion a couple of years later, assuming no economic dip or wild spending plans out of the legislature. The surplus would be on top of new money for many budget items, especially education.
At a Milken Institute event last Thursday, Governor Jerry Brown cautioned against depleting the surplus.
After telling the audience, “So there will be a great effort to spend it as quickly as possible,” Brown urged the money go into a rainy day fund. He also referred to the surplus labeled “obscene” by state Treasurer Jesse Unruh in 1978 that led in part to the passage of Prop 13, which Brown also mentioned in his speech, inferring that the surplus should not be taken away by tax cuts, either.
The news about the projected surplus comes at a time when some groups are agitating for tax increases. Powerful Sacramento players last week filed an initiative? to raise the car tax to fund road repairs. There has also been much chatter about raising different taxes via the initiative process through an oil severance tax, a split roll property tax, and a cigarette tax.
The push for all these measures just became harder with the LAO’s pronouncement.
Pleading for new taxes while the state is holding a large and growing surplus will become a much more difficult sell to the voters.