10 Things You Didn't Know About California's Budget

The Golden State is facing a large budget deficit

Posted June 26, 2009

California's economy is larger than that of many countries, including Canada and Brazil.
The state's deficit is estimated at $24 billion for the fiscal year that begins July 1.
Gov. Arnold Schwarzenegger's budget proposes slashing health and welfare spending by 26.5 percent and closing 80 percent of state parks.
To cut the deficit, Schwarzenegger has stated that he would eliminate the state's basic welfare program, which serves 1.3 million residents.
Democrats are seeking alternatives to major cuts, such as rescinding $1 billion in corporate tax breaks, enacting a 10 percent tax on oil pumped in California, and tapping into a $4.5 billion rainy-day fund.
Californians pay the second-highest sales tax in the nation; the state's gas tax is the third-highest in the nation; and California's top earners have the second-highest state income tax rate in the country.
California residents with incomes of more than $500,000 pay nearly 40 percent of the state's personal income tax revenue.
A state ballot initiative approved by voters in 1978 limits property tax rates, the primary source of revenue for school districts and local governments, to 1 percent.
California has the highest research and development tax credit in the country, which will cost the state $1.2 billion in potential tax revenue this year.
State officials have said that California will run out of cash by the end of July. Schwarzenegger sought a $6 billion loan guarantee from the federal government, but his request was denied.