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Even if voters Ok tax hikes, California faces chronic deficits for years to come

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POSTED May 16, 2012 9:20 p.m.

 

SACRAMENTO  (AP) — Even if voters approve Gov. Jerry Brown's proposal for higher taxes this fall, his ballot initiative would be only a partial solution to the state's chronic budget deficits.

California is expected to face shortfalls for the foreseeable future and in some cases the financial pain will persist for residents.

Officials at the University of California, for example, are considering plans to raise tuition by 6 percent this fall. If voters reject Brown's tax hike in November, the officials warn of a mid-year, double-digit tuition increase or drastic cuts to campus programs and staffing.

"Whether the tax initiative passes or fails, the UC still loses," said Cheryl Deutsch, 27, a graduate student in urban planning at the University of California, Los Angeles.

Deutsch said Brown's proposed tax increases would not do enough to staunch the massive cuts that have led to an exodus of talented students and faculty.

The California State University system hiked tuition by 9 percent for this fall and froze admissions for next spring in response to state budget cuts. Chancellor Charles Reed said Brown's tax hikes would only provide level year-over-year support after the state cut $750 million from the 23-campus system last year.

"All Californians should be concerned about the serious long-term damage to student access to the California State University that is posed by the $250 million trigger cut," Reed said in a statement about how much the CSU system could lose if voters reject Brown's tax hike.

Brown announced over the weekend that the projected state deficit has swelled to $15.7 billion through the 2012-13 fiscal year. He previously proposed a tax hike that would fill about half that shortfall and said he would lean on majority Democrats to make deeper cuts to social services and health care programs for the poor.

"What I'm proposing is not a panacea, but it goes a long way toward cleaning up the state's budget mess," Brown said in a video message.

Brown's tax hike is projected to raise $8.5 billion through mid-2013. Of that amount, the administration projects $5.6 billion will benefit the general fund.

The governor called for a contingency plan to shorten the public school year by as much as three weeks and make deeper college cuts if the tax plan fails.

Republicans criticized Brown, saying he was targeting education in an effort to gain support for his tax hikes. They say a good portion of the governor's proposal and the budget from last year were filled with funding shifts that allowed lawmakers to avoid real program cuts.

"Last year, even half of the so-called cuts were not cuts, certainly not to state government," said Senate Minority Leader Bob Huff. "They know if they don't cut the scope of the government, nobody will buy the higher taxes."

 

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