California Proposed Tax Hikes

The Californian - did a great analysis of the Governor's proposed tax hikes to fix the state's broken budget.

SALES TAX: 1.5 percent increase for three years.


ALCHOLIC DRINK FEE: Five cent per drink in the excise tax on a 12-ounce beer, five-ounce glass of wine, and a 1.5 ounce drink of distilled spirits, beginning Jan. 1.

Beer fees would increase from 20 cents to 73 cents per gallon. Wine fees would increase from 20 cents to $1.48 per gallon. Distilled spirits fees would increase from $3.30 to $7.57 per gallon.



GOLF/OTHER SERVICES: Applies the sales tax for first time to any fees charged for admission to golf courses, such as green fees; appliance, vehicle and furniture repair, and veterinarian services beginning Feb. 1. Tax includes the state sales tax of 6.5 percent plus local addition. The 1.5 percent temporary sales tax increase also would apply for three years if it is enacted.

Also imposes the sales tax for the first time to amusement parks and sporting events beginning March 1.



OIL: Imposes, for the first time, an oil severance tax at the rate of 9.9 percent per barrel of oil pumped, beginning Jan. 1. No oil severance tax now exists.


VEHICLE FEE: Increases the annual vehicle registration fee by $12 on top of an $11 increase approved in the current state budget, beginning Feb. 1.


DEPENDENT EXEMPTION CREDIT: Permanently cuts the dependent exemption credit to equal the personal exemption credit. This would drop the dependent credit from $309 per child or other dependent to $99 starting in the 2009 tax year.

CUTS



WILLIAMSON ACT: Eliminates this fiscal year and in 2009-10 the $34.7 million that the state reimburses counties annually under the Williamson Act to cover reduced property taxes to preserve farmland, scenic and other open spaces. Counties could continue to contract with farmers to operate the program but would have to absorb the tax losses. In 2007, Monterey County received $962,326.


RURAL CRIME: Eliminates $3.7 million for multi-county programs to combat agricultural crime, including in Monterey County.


SCHOOL YEAR: Proposes to give school districts the option to cut the 2009-10 school year by five days to help deal with budget problems.

OTHER



FIRST FIVE COMMISSIONS: Eliminates the commission created by Proposition 10, which raised cigarette taxes to pay for early childhood development, so state funds and half of the local funds could help pay for children's programs. Requires voter approval.


MENTAL HEALTH: Revises Proposition 63, which taxes the wealthy to pay for community-based mental health programs, to help pay for state mental health programs. Requires voter approval.


JUDGES: Pays for 50 new judges in each of the next two budget years to complete a multi-year plan to boost the number of judges by 150. It's not clear how the new judges would be allocated, but from the initial group of 50 judges previously approved, Monterey County received one.


HIGH SPEED RAIL: Proposes $123 million in 2009-10 from the $9.95 billion bond approved in November to begin the detailed engineering, design and environmental work on the 200mph train that would run connect Northern and Southern California through the San Joaquin Valley. Funding is dependent on the state being able to return to the bond market.


INDIAN GAMBLING: Reduces the estimated amount of revenue that the state will get from tribal casinos by $123 million to $362 million in 2008-09 and by $192 million to $393 million in 2009-09 because of the economic downturn.

REVENUE



$2.1 billion: Shifts these funds from Proposition 10, which raised cigarette taxes to pay for early childhood development, to children's health programs. Requires voter approval.