Governor Jerry Brown upended California's budget debate on Monday (May 16) when he announced that the state is expecting an extra $6.6 billion in tax revenue over the next 13 months, a sum large enough to scale back the tax increases he has been seeking for months.
Brown's announcement "erases a substantial chunk of what had been a $15 billion deficit" and allows the governor to pour $3 billion more than he expected into public schools, the Los Angeles Times reported
. But it also complicates the rationale for the higher income, sales and vehicle tax rates he says are necessary to put California on solid fiscal footing.
The governor says the state still needs the higher taxes to address a "wall of debt," among other structural problems, though he did change his plans on Monday by delaying some of the tax hikes he is seeking. Republicans, however, say the revenue announcement shows that the governor's entire tax plan is unnecessary.
"With $6.6 billion in new revenues, Republicans are right," GOP senators said in a statement. "We don't need, and it's ridiculous to ask voters for, five years of new taxes."
The unexpected news out of California wasn't the only example of improving revenue projections on Monday.
Michigan revenues will be $429 million higher than expected, the Detroit Free Press reported
. The uptick is "due to a recovery economy and a resurgence of the auto industry after the bankruptcies of GM and Chrysler in 2009," the paper noted, citing a University of Michigan economist.
In New Jersey, the state will take in $917 million more than once projected as a result of improving income tax collections, The Star-Ledger of Newark reported