The state of California has collected $4.6 billion more in tax revenues this year that expected. What if the government stashed a fraction of that for a rainy day?
Assembly Speaker John Pérez (D-LA) told the Sacramento Press Club on Wednesday that such a move would insulate the state from revenue swings like the ones in recent years that forced lawmakers to slash funds for public education and vital health and welfare services.
Pérez said with California’s economy in recovery, now’s the time to act: “We must pivot from ending the crisis and turn to the future."
The speaker wants to put a measure on the 2014 ballot that would preserve any Capital Gains Tax spikes that exceed 6.5 percent of the state’s general fund budget. The speaker’s office reports that’s occurred in about half of the past 20 years.
California already has a rainy day fun that Governor Arnold Schwarzenegger established in 2004. But governors can waive the required contributions. Pérez said that doesn't cut it.
“A rainy day fund that you establish and don’t fill is no rainy day fund!” Pérez said.
His ballot proposal would double contributions to the existing fund to ten percent of the state’s general fund revenues.
Pérez’s proposal would replace one already on the 2014 ballot that Republican state lawmakers favor, but public employee unions oppose. It would kick in when all state tax revenue exceeds three percent of general fund spending.