Senator Gaines Issues Budget and Tax News

On June 28, the Democrats put forward another proposed budget plan. It was the fourth Democrat majority vote budget attempt this year, and the fourth time I voted “no.”
My plea for real pension reform, a hard spending cap, job creation and a change in the way government does business is clearly falling on deaf ears. Instead, this budget relies largely on the hope that an additional $5.2 billion in new tax revenues will miraculously appear in the treasury. Should that additional revenue not materialize, education and public safety will pay the price with deep spending cuts.
I’m not willing to hedge that kind of a bet when our economy is still struggling and the unemployment rate continues to hover at 12 percent. I’ve said this time and time again – we need to enact serious, long-term solutions that will not only prevent future financial meltdowns, but will encourage job creation and allow California’s economy to recover. That’s why I will continue to fight for the necessary reforms to get our state back on track.
Amid all of this budget debate, there is a silver-lining that is cause for celebration – taxes are going down starting today, July 1!
In 2009, despite my strong objections, the legislature crafted a budget deal that raised the sales and personal income taxes, nearly doubled the state’s already high vehicle license fee, and lowered the dependent credit allowed on state income taxes.
The June 30th expiration of the 2009 tax increases will allow the dependent tax credit to return to $309 per child, up from the punitive $99 of the past two years. The state sales tax will go down one percent. The vehicle license fee will drop from 1.15 percent of a car’s value to .65 percent. The personal income tax increase had already temporarily expired after two tax cycles.

All told, this reduction in tax rates will save California taxpayers almost $6 billion a year or approximately $1,000 per family.
So enjoy this Independence Day weekend, and enjoy the fact that for once, California taxes are heading in the right direction.