Prop Zero
The Starting Point for Commentary and Coverage of California Politics

Obama, GOP Deal Could Add to California Deficit



    Associated Press
    President Barack Obama makes a statement to reporters after his meeting with Democratic congressional leaders on a year-end bipartisan agreement to extend expiring tax cuts, at the Eisenhower Executive Office Building, part of the White House complex, in Washington. (AP Photo/J. Scott Applewhite)

    The controversial tax and stimulus deal between President Obama and Congressional Republicans has one big potential loser: California state government.

    Changes to the estate tax, sought by Republicans in the negotiations, would cost California billions (the $2.7 billion figure being used by some media organization is probably too high, for accounting reasons that are too complicated to go into here). Gov-elect Jerry Brown cited the changes in raising his estimate of the state's 18-month budget deficit to $28 billion from $25 billion.

    More details on how this estate tax provision would work -- and how it would hurt California -- are here.