Democratic California Governor Jerry Brown is urging deep spending cuts and increased taxes to deal with the state's massive deficit, which ballooned to nearly $16 billion since January.
The shortfall is $6.5 billion more than Brown had anticipated.
"We're going to have to cut deeper," Brown said in his budget outline Monday. "But cutting alone really doesn't do it...That's why I'm linking these serious budget reductions - real increased austerity - with a plea to the voters: Please increase taxes temporarily on the most affluent and everyone else with a quarter of a cent sales tax."
Brown outlined $8.3 billion in cuts to education, health care and welfare, about 17 percent of discretionary funding for the state and also asked state workers to accept a 5 percent pay cut by reducing their work hours to 38 over four days.
The governor also urged voters to come to the polls in November to pass a proposed hike in sales taxes from 7.25 to 7.5 percent. If this hike isn't passed, Brown said an $6 billion worth of additional cuts, mostly to education, would take place January 1.
This could lead to further tuition hikes in California State University and University of California systems, a contentious issue leading to hundreds of protests on campuses statewide. On the flip side, if the tax hike is approved, public schools would receive an additional 16 percent in funding. The system of higher education would also receiving a funding bump.
Brown's new budget also sets out $1.2 billion in cuts to Medi-Cal, the state's version of MediCare, and $1.3 billion in cuts to welfare and child care.
California's economy has not shown a significant improvement since the 2008 financial collapse, with home foreclosures remaining the highest of any state and employment at 11 percent, nearly three percent above the national average. State tax payments and consumer spending is down due to all these factors, which contributed to the ballooning deficit.
Democrats in the state legislature said they will cut as much as possible while keeping essential services, while state Republicans blamed the ballooning deficit on unsustainable policies such as public worker pensions and teacher accountability programs.
"Today's news underscores how we must rein in spending and let our economy grow by leaving overburdened taxpayers alone," Republican Assembly leader Connie Conway said in a statement.
Today's announcements will be the start of a contentious month of debate over the proposed budget. It must be passed by June 15 to take effect at the start of the fiscal year on July 1.
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