The state of California is on the brink of bankruptcy with a $40 billion budget deficit (projected July 1).

A new measure by the state Democrats seeks to cut spending on health care, education, and prisons and increase taxes and fees. California requires a two-thirds vote for all tax increases, compliments of Proposition 13 which was passed by voters 30 years ago. So what does the incompetent government do to sidestep this requirement?

They remove the gasoline tax and swap it with a “fee”, with the revenue going towards transportation projects. Since it is *supposedly* for a specific function, the judicial system would view it as a fee. Currently there is an 18 cent tax per gallon plus a sales tax; the proposal would replace those taxes with a 39 cent per gallon “fee”. The effective increase to the public would amount to 13 cents per gallon.

The plan:

• $9.3 billion in tax and fee increases
   
  • 3/4 cent on the dollar increase in state sales tax
   
  • 2.5% increase in personal sales tax
   
  • A 9.9% per barrel tax on oil extracted from California
   
  • 3% income tax witholding on independent contractors
   
  • 5 cent tax on beer, wine, and spirits.
   
• $7.3 billion in cuts
• $1.5 billion in labor concessions

With the gas tax changing to a “fee”, the proposal is able to be touted as “revenue-neutral”, therefore only needing a simple majority vote.

California is not business friendly, and until it makes drastic changes, things will only get worse.

Some data from Investors Business Daily:

• The cost to do business in 2006 was 23% higher than the avg for the rest of the states.
• Energy costs are 35% higher than the national average
• Such business mainstays as Intel, Exxel Outdoors, Toyota and Tesla have already left California.
• Even Hollywood has left: in 2003, 66% of Hollywood’s feature films were made in-state; today, it’s down to 31%.
• Last year, 135,173 more people left California than moved in, the fourth straight year of net out-migration.

Raising taxes during a recession will not solve the state’s budget crisis as it will crush the economy. And California already has one of the highest tax burdens in the country (6th).

California needs to address the estimated $10 billion that illegal aliens cost the taxpayers per year, shut down numerous social programs, make spending cuts across the board, and REDUCE taxes. It has been shown time and time again that reducing taxes actually increases the amount of money that the government brings in.

The proposal by the state Democrats is ridiculous - it’s completely out of touch with the economy and businesses. Moreover, it’s dishonest with it’s own citizens.

The Golden State is more like the *Fools* Golden State.