When legislative leaders and the Governor worked out a budget deal last month, they included a special clause. It said that if California got ten billion dollars in deficit relief money from the federal stimulus package, cuts to social services and an income tax hike would be reduced. HD Palmer with the State’s Department of Finance says so far, their analysis shows California will only get eight billion:
“At the moment we’re two billion dollar below the target that would make those cuts and that one tax increase go away, but that’s not the last word on the subject.”
Palmer says they’re still hoping for more federal money. Overall, the state will likely get tens of billions from the stimulus package – but much of that will go to specific things like education or unemployment benefits….and can’t be used to address the state’s shortfall.