New Budget Equals New Taxes

February 20, 2009 12:00:00 AM PST
The wait is finally over. California Governor Arnold Schwarzenegger signed the state's new budget Friday afternoon--closing the state's 42 billion dollar budget deficit. The governor used his line-item veto power to cut out another billion dollars in state spending--chopping ten percent from the budgets of all constitutional officers, except Lieutenant Governor John Garamendi.

His budget will cut 60 percent. The new budget is heavily dependent on voter approval. Among the measures on the May 19th ballot--Californians will be asked to borrow against lottery revenue to modernize and improve sales, allow flexibility in how the special tobacco tax is spent for Children's programs and change how the mental health tax is distributed. While California has averted a financial meltdown, taxpayers will be paying for it.

Peggy Day sells Harley Davidson Motorcycles in Northwest Fresno. Customers will soon be paying more for a motorcycle and everything else in California with a sales tax. It will increase by 1 percent. For most Fresno County residents, the tax is going up from 7.9 percent to 8.9 percent. The increase takes effect on April 1 of this year. Day said, "On an average motorcycle that costs 20 thousand dollars, that's almost a two hundred dollars sales tax increase. When you look at monthly payments, that's only a couple of dollars."

Anthony Loya is outraged. To re-register his car will cost much more. Vehicle license fees are nearly doubling from 0.65 percent of a car's value to one percent. The hike takes effect in mid May 2009. Loya said, "How are people going to pay for all of this if things are already hard as it is. That's what I can't understand."

Taxpayers hoped to have their state tax refunds by now. But the governor's signature on Friday doesn't guarantee payments soon. H.D. Palmer works in California's Finance Department. Palmer said, "Unfortunately it is not a situation where the governor signs the budget on Friday and the checks start going out the door on Monday. It is going to take some time and there will be some continued delays in the payments that have been withheld."

More of your money is scheduled to go to state government through the year 2012.

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