Plunge In Tax Revenue May Force Calif. To Cut Public Safety, School Funding

LOS ANGELES (CBS) — A new wave of budget cuts could be on the way for Southland social services, public safety and even schools after California faces a massive cash gap.

KNX 1070’s Charles Feldman reports that’s the message coming from the state controller’s office.

Controller John Chiang said California could face a shortfall of as much as $1.5 billion during the first four months of this fiscal year.

“We need better news,” said Chiang.

One of the biggest factors behind the crisis is California lawmakers spending far more than what the state is collecting in revenue — over $2 billion more than budget analysts projected for the first quarter alone.

Chiang also pointed to personal income tax revenue plunging by an estimated $451 million — 12.9 percent — in a drop the Franchise Tax Board blamed on both lower withholdings and estimated tax payments.

The gloomy report amplifies fears the state will impose deeper budget cuts this winter.

Under the budget deal signed by the governor in June, the state will automatically cut a variety of programs depending on how deep budget analysts determine the revenue shortfall will be.

A gap between $1 billion and $2 billion would trigger cuts in social services, public safety and higher education. Any shortfall exceeding $2 billion would likely lead to cuts for K-12 school and community colleges.

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