Raise taxes, fees - delay tax breaks, California Legislative Analyst urges

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AP Photo/Rich Pedroncelli

Gov. Arnold Schwarzenegger discusses the need for change in the state's budget process during an appearance at the annual California Chamber of Commerce Host breakfast in Sacramento, Calif., Tuesday, May 18, 2010.

The legislative analyst urged lawmakers to raise taxes and fees - and delay tax breaks - to prevent some of the governor’s deepest cuts to health and welfare programs. The non-partisan agency that advises California’s legislature on spending reacted to the governor’s budget plan today.

In its report, the Legislative Analyst’s Office agreed with Governor Schwarzenegger’s estimate of the state’s deficit - $19 billion.

But it urged a “less drastic” approach to close the gap.

The analyst urged lawmakers to reject the governor’s most extreme cuts, including a plan to eliminate CalWorks—the state-funded program that provides low-income families with monthly cash grants.

The analyst said alternative spending cuts and increased revenues could sustain critical components of many programs—and urged lawmakers to include proposals for increased fees and taxes in their budget.

The Office warned that even if the legislature adopted all $12 billion of the governor’s cuts, California would still face multibillion-dollar deficits for years to come, in part because of its pension and retiree healthcare liabilities.

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