Cuts and Higher Taxes Coming to Cali. Despite Stimulus

Friday, Mar 27, 2009  |  Updated 11:00 AM PDT
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Cuts and Higher Taxes Coming to Cali. Despite Stimulus

Getty Images/Steve Bronstein

State officials say California will not receive enough direct aid from the federal stimulus package to prevent nearly $1 billion in cuts and higher taxes.

State officials say California will not receive enough direct aid from the federal stimulus package to prevent nearly $1 billion in cuts and higher taxes.

The state finance director and state treasurer announced Friday that the federal stimulus bill will provide almost $8.2 billion to offset declining general fund revenue between now and June 30, 2010.

The state needed nearly $10 billion to avoid more cuts and higher taxes under the budget deal lawmakers and Gov. Arnold Schwarzenegger reached in February.

That means taxpayers will see an increase in the personal income tax rate of 0.25 percent, an amount that would have been cut in half had the state received $10 billion for its general fund.

Other cuts will be made to cut courts, health care programs, higher education and social services.

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