Budget Compromise Could Impact Your Paycheck

September 15, 2008 12:00:00 AM PDT
Finally, after eleven weeks of bickering, lawmakers are putting the finishing touches on a budget deal cobbled together over the weekend. Bottom line: Republicans win big because it does not raise taxes.Assm. Speaker Karen Bass, D-Los Angeles, says "The budget isn't what any of us want. This is what we need to stop the bleeding in California, frankly."

While Democrats managed to fight off deeper cuts, they grudgingly agreed to axe $9 billion dollars from the budget. Education, for example, won't get all of its cost-of-living increases.

Absent new taxes, the state will fill its coffers by:
- Closing the yacht tax loophole
- Suspending some corporate tax write-offs
- Requiring millionaires and quarterly filers to pay more of their taxes earlier
- and, temporarily withholding 10% more from paychecks of two-income families starting January 1st.

While those families could get most of that back as a refund after they file, Californians have mixed feelings about the financial maneuver. Elizabeth Connolly, Supports New Tax Withholding, "I'm willing to do my share, and everybody who can afford to, should."

Mark Androvich, Opposes New Tax Withholding, says "I just think that's a ridiculous thing! People are going to cut back. We're trying to cut back because of the price of gas and everything."

News of a budget deal, though, brings relief to the hundreds of services that rely on state funding. Sacramento has not given them any money since the beginning of the fiscal year, July 1st, and many were about to shut their doors.

Jennifer Crossetti, Adult Day Care Provider, says "We're grateful that the people who receive this service are going to keep this service. And that's what is most important to us, as their provider. Outside of that scope is the concern of us facing this same dilemma every single year."

And that's what this budget compromise does: fixes the budget deficit for this year with temporary revenue, but not future years.

Kevin Gordon, Public Schools Lobbyist, says "I think what people worry about is this budget that's precariously put together sort of with chewing gum and baling wire, just so these guys can get out of town ... creates a huge problem and a threat next year."
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