Analyst says Jerry Brown is overestimating tax revenue
The state’s top budget analyst said Friday that Gov. Jerry Brown's revised tax initiative will generate much less revenue than the governor estimates.
Legislative Analyst Mac Taylor said the state will reap $6.8 billion, not $9 billion, in the upcoming budget.
Brown revised his tax initiative, which he hopes voters will approve at the ballot box in November, after reaching a deal to join forces with liberal groups pushing a different plan. The new initiative includes a smaller sales tax increase than the governor initially wanted and a larger surcharge on the state’s wealthiest.
Friday’s estimate from the Legislative Analyst’s Office is another in a series of reports undercutting Brown’s budget proposals. When the governor said his original tax plan would generate $6.9 billion, the analyst pegged the amount at closer to $4.8 billion.
H.D. Palmer, spokesman for Brown’s Department of Finance, said the administration is expecting to earn more from taxes on capital gains, such as the sale of stock, than Taylor has predicted.
California tax revenue can be difficult to estimate, particularly because of the state's reliance on taxing its richest residents, whose incomes rise and fall more dramatically.
"Given this volatility, estimates of the revenues to be raised by this initiative will change between now and the November 2012 election, as well as in subsequent years," Taylor's report says.
-- Chris Megerian in Sacramento
Photo: Legislative Analyst Mac Taylor at a news conference last year. Credit: Rich Pedroncelli / Associated Press