07/04/2022

California budget may hit tax rebate threshold

The saga of Gov. Jerry Brown’s budgetary labors has taken an unexpected twist, potentially triggering an all-but-forgotten provision designed to funnel money back to taxpayers. 

In 1979, taxpayer advocate Paul Gann spearheaded a ballot measure designed to place a curb on Sacramento spending by requiring rebates at a certain level of state spending. “Subsequent voter-approved changes to the limit have made it a fiscal afterthought for the past quarter-century,” as the Sacramento Bee noted. “Yet a recent report by the nonpartisan Legislative Analyst’s Office contained breaking news in the complex world of government budgets: Brown’s January proposed budget wrongly excludes $22 billion from total spending subject to the limit, and after accounting for the money, state government is as close as it’s been in decades to exceeding the threshold.

“The report creates the prospect of upended spending priorities or even the first taxpayer rebates in 30 years. And if lawmakers stick with the governor’s methodology, the state would be ‘highly vulnerable’ to a lawsuit, in the analyst’s view.”

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