New budget comes at a price for taxpayers

February 20, 2009 1:43:43 PM PST
On his way to a lunch meeting in the Bay Area, State Controller John Chiang was not exactly celebrating the long-awaited budget agreement in Sacramento.

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"It's a wait and see; we have to see the quality of the budget deal," Chiang said. "I would encourage the governor and the legislature to continue working, because we may have major difficulties going into the next fiscal year."

As it stands now, the biggest chunk of new revenue will come from a 1 cent sales tax increase, a 0.25 percent increase in the state's personal income tax rate, a 77 percent increase in vehicle licensing fees and a reduction of the dependent child tax credit from $300 to $100.

Click here to read more about what it took to finaly pass a budget.

The Howard Jarvis Taxpayers' Association estimates the tax increases will cost an average family of four nearly $1,400 dollars per year.

"It doesn't solve the problem," executive director of the Contra Costa Taxpayers Association Kris Hunt said. "Even the people in Sacramento admitted they used rather robust calculations in terms of what they'll generate from the sales tax and the income tax and those aren't likely to materialize."

The 12 cent per gallon gasoline tax was left out of the final budget, but some wonder, at what price.

Janet Murphy thought the gas tax was not such a bad idea, given the alternatives.

"Since the gas prices have gone down, it seems like that would be the logical place to tag on a tax, that we might not feel the crunch as much," Murphy said.

Golfers at least have something to celebrate in the budget agreement. A proposed tax on their endeavors did not make the cut.

"The golf industry in California overjoyed that it's not an element of the new state budget," Tom Schunn, of the Sequoyah Country Club said.

Golfers do expect lawmakers to take another swing at them in a future round of budget talks.

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