Board of Equalization Member Diane Harkey released the following statement regarding Governor Brown’s budget proposal:
“I’m pleased to see the Governor’s budget plans for a recession occurring in the near future, as market indicators seem to support that assumption. With a $4.5 billion rainy day fund and a proposal to increase that fund to $8 billion or 65% of target by end of the 2016-17 fiscal year, California should weather a downturn with a minimal amount of sacrifice.
“However, much will depend on the Legislature’s cooperation and willingness to resist the urge for increasing or establishing new program spending in this election year. The projections show $124 billion in revenue up $4 billion from the current year and up $21 billion from the budget high of $103 billion at the 2008 financial crash.
“Another potential impact to the state’s financial plans will be a number of initiatives on the ballot this November for voter approval. Many will request tax increases to benefit a specific cause. Others, such as the proposals to legalize recreational use of marijuana, if approved, will assuredly require greater public safety resources in communities, as transition from black market to regulated and permitted cultivation, manufacturing and retail sales progress. While anticipation of new state taxes are the lure, how they are restricted and allocated may be problematic. In addition, reporting and collecting from an industry that is adverse to keeping books and records is not without challenges.
“So, as we move into a new year, we have a new opportunity to ensure our job creators and job seekers remain in our Golden State. We can only ensure a positive outcome if the taxes our state levies and collects are used for services our people need and expect government to provide. Funding public safety, water, power, transportation and education are the ticket to creating a sustainable economy to weather downturns and attract well-paid, full-time jobs to our state.”