The fate of the much-maligned trigger cuts was announced by Governor Brown and state finance officials when they released an updated version of the state’s revenue forecast Tuesday. While many programs and services will be impacted, the direct impact to local governments will mostly be felt with respect to library funding and counties will be charged more for housing offenders. Outlining the options before the state, Brown commented, “You either cut or you tax. There’s no other way.” While there were fears that K-12 schools would face major cuts, in fact the reductions slated for education will be far less than anticipated and instead higher education and child care will be among the components that will have slashed funds. According to the Department of Finance, the state’s revenues are $2.2 billion below projections. Cutting to the chase, the state will impose $980 million in mid-year trigger cuts.
You can watch Governor Brown’s press conference on the budget here.
Notably, the figures presented by the Department of Finance were far rosier than the estimates of the Legislative Analyst’s Office, as the LAO stated California would fall $3.7 billion short on revenues and that far more would have to be cut January 1st. However, state officials have pointed to strong November sales taxes and higher revenues as factors that have softened the blow on the trigger cuts. The Department of Finance’s report on the revenue forecast states the following:
- "Personal income tax revenues are estimated to be $1.529 billion higher. High-income wages and salaries were stronger in 2011 and 2012 than previously estimated. Proprietor’s income is also estimated to be higher. However, capital gains are mixed: estimated to be slightly lower in 2011 and slightly higher in 2012;
- Sales tax revenues are estimated to be $232 million lower, primarily due to the result of the delay in implementation of use tax collection changes, a lower projection of inflation, and a higher projection of unemployment; and,
- Corporation tax revenues are estimated to be $467 million higher, primarily because of a higher corporate profits forecast.
- This net increase in the state’s biggest three tax sources was insufficient to fully offset the $4 billion in unallocated revenues described above"
Outlined below are some of the cuts that will take effect in 2012:
- $100 million to the University of California.
- $100 million to California State University.
- $100 million to developmental services.
- $100 million to In-Home Supportive Services.
- $72 million in increased charges to counties for young offenders sent to state prison.
- $30 million to Community Colleges.
- $23 million to child care programs.
- $16 million to local libraries.
- $60 million miscellaneous.
You can read the full report here. For those hoping that the Legislature will rally around a last-minute effort to prevent the trigger cuts, relying on the abilities or efficacy of Sacramento is sure to end in disappointment.
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