California’s budget, as any current resident is aware, is in deep trouble.
In a new report, Legislative Analyst Mac Taylor forecast that the state would need to close a $27.8-billion budget gap during the next 20 months. That projection is more than $3 billion higher than the Schwarzenegger administration has estimated.
That’s not chump change. Arnold’s proposed solution is to raise the sales tax. The response:
Though calling the governor’s proposal “credible,” the analyst said raising the sales tax would further hurt the economy by discouraging Californians from buying local products and instead send them to Internet purchases that escape the state sales tax.
Schwarzenegger’s proposed increase would make Californians’ average sales tax the highest in the nation, about 9.5%, the analyst said. Taylor recommended a smaller increase of 1 cent on the dollar.
The analyst favored increasing the annual vehicle license fee, from 0.65% of a car’s value to 1%. It is an idea that already has traction among Democratic lawmakers, but one that Schwarzenegger has resisted.
Ah, the vehicle license fee. That fee that encourages people to only own the cars that they need. That fee that cuts down on beaters being on the road. That fee that… got… Davis… recalled. Yes, there were some problems with it (its horribly regressive, even when applied to the car’s value), but I can’t help but wonder… how much more money the state would have in its coffers right now (not to mention fewer cars on the road) if that fee had been around since 2003…