Lawmakers: Tax Hikes Still Needed Despite $2B Revenue Boost

SACRAMENTO (CBS) — California’s coffers were surprisingly $2 billion richer on Thursday, but a fierce political battle over looming tax increases could quickly overshadow the find.

KNX 1070’s Jon Baird reports an unexpected windfall in tax revenues likely won’t be enough to sway Governor Jerry Brown to abandon his plan for tax increases.

Despite the congratulatory tone in the state capital, at least one finance official said the governor’s plan for tax increases should still go toward cleaning up California’s remaining $15 billion fiscal mess.

H.D. Palmer, a spokesman for the state Department of Finance, called on lawmakers to look at the big picture when it comes to the state’s massive deficit even with the newly-found funds.

“It doesn’t lessen the necessity for the legislature to take the tough steps that are still necessary to close this budget gap,” Palmer said.

But Assembly Minority Leader Connie Conway pointed to the extra cash as proof that California won’t need the tax extensions.

“Ask the people after we’ve already solved the problem,” Conway said. “Don’t make them responsible for five years’ worth of a new tax burden that may not be necessary to balance the budget.”

(©2010 CBS Local Media, a division of CBS Radio Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. Wire services contributed to this report.)


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