As the
annual budget deliberations get under way today with the release of
Schwarzenegger's revised budget, Democrats do not like a plan to freeze welfare
payments, Republicans are cautioning about spending, and a declining housing
market is dampening the outlook for next year. Where has the windfall of
dollars come from? From you and me: personal income taxes, which account for more than half
of the state's $100 billion-plus general fund, and those tax receipts surged in
early April, the state ending up with about $200 million more in
personal income taxes than the governor had estimated in January -- a
projection that itself was called overly rosy. "Income taxes came in at a level no one
thought possible a few weeks ago," Assembly Budget Committee
Chairman John Laird, D-Santa Cruz, said last week. "We thought we were
headed toward a tanking budget."Assembly Republican leader Mike
Villines of Fresno
said that although he is expecting a host of hard budget decisions, April
"made everyone breathe a sigh of relief." "We're at a point in the economy in which
every day there is some contradictory bit of information," said Chuck
Williams, dean of the University of the Pacific's Eberhardt School of Business.
"The stock market plunges, then it rises. There is mixed data on
inflation. There's a lot of uncertainty and ambiguity." Williams said he
expects the state's economy to continue to grow at a lower rate than in the
past few years, but at a healthy clip nonetheless.