Issue link: https://www.epageflip.net/i/65684
8A Daily News – Tuesday, May 15, 2012 SACRAMENTO (AP) — California's sputtering eco- nomic recovery is putting a heavier-than-expected drag on state tax revenue, leading Gov. Jerry Brown on Monday to propose deep budget cuts across an array of government ser- vices and warn again that even more cuts are ahead if voters reject his tax-hike initiative in November. Brown's latest budget plan for the fiscal year that begins July 1 proposes $8.3 billion in spending cuts to close a revised deficit of $15.7 billion deficit, an amount equal to 17 percent of the state's entire general fund. The plan would reduce child care for mothers trying to get off welfare, in-home supportive services for the needy and health care for the poor, as well as cut funding to courts and postpone payments to schools. Those reductions come on top of tens of billions of dol- lars in state budget cuts implemented since the recession started in late 2007. Brown, a Democrat, also is asking state workers to share the pain by taking a 5 percent pay cut, most likely by reduc- ing their work hours. The pay reduction would be handled in contract negotiations with the state's public employee unions. In addition to the cuts, Brown hopes to close the deficit with $5.9 billion in new revenue from the tax initiative he proposed earlier this year that would temporarily add a quar- ter cent in the state sales tax and collect higher income taxes on those who make $250,000 a year or more. Tehama County DAILYNEWS Farm Bureau and RED BLUFF TEHAMACOUNTY T H E V O I C E O F T E H A M A C O U N T Y S I N C E 1 8 8 5 Candidates Forum co-sponsoring the The Races Invited: US Representative District 1 Assembly District 3 Superior Court Judge 1 Superior Court Judge 2 Supervisor 1st District Supervisor 2nd District Supervisor 5th District May 23 ★ 6:30 pm Red Bluff Veteran's Hall Why - So that the voters of Tehama County will be educated and better able to make their voting choices. Governor eyes more cuts as deficit swells If voters reject the tax increases in the fall, Brown is proposing $6 billion in additional automatic spending cuts, almost all of which would fall on K-12 schools. ''Cutting alone really doesn't do it,'' Brown told reporters in releasing his $91 billion general fund budget plan. ''And that's why I'm linking the serious budget reductions — real increase to 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.'' Another $2.5 billion would involve delaying paying debt and other internal borrowing. Brown said his balanced approach was a fair and reason- deem essential services. Senate President Pro Tem Darrell Steinberg, D-Sacra- mento, said Democrats are not looking for a public fight with the governor. Republicans said the majority party has refused to enact reforms such as public worker pension and teacher account- ability. ''When you have unsustainable policies, you have unsus- tainable budgets,'' said Republican Senate leader Bob Huff of Diamond Bar. able way to balance the budget. The sales tax increase would last four years while the income taxes on the wealthy would be raised for seven. The revised budget deficit is $6.5 billion more than the $9.2 billion gap Brown anticipated in January. He blamed the widening shortfall on court judgments that prevented him from making cuts to programs such as Med- iCal and In-Home Supportive Services and on the state's sagging economy. Unlike many other states, California has yet to show sig- Speaking to reporters, Brown addressed the difference between the optimistic state revenue projections he expected months ago and the reality of today's numbers. Based on the best figures the state could gather, he said he nificant progress in emerging from the worst economic downturn since the Great Depression. Unemployment has crept back up to 11 percent, among the highest rates in the nation. The national unemployment rate has dropped a full percentage point since August — to 8.1 percent in April. Also in California, home foreclosures also remain among the highest of any state. Home construction, a key driver of the state's economy, continues to be depressed, while home prices in many parts of the state have not recovered. Those factors have depressed household spending and led to a decline in most tax collections for the state and local governments. believed at the time that there was a ''reasonable shot'' at getting an additional $4 billion in revenue. ''We didn't get it. ... We always have to prepare for get- ting less than we expect or in some cycles we get more. That's the way it is,'' Brown said. ''But the point is, it's very easy to play gotcha. But when I have to cut and people lose their jobs — a mother loses her child care, maybe her job — I'm reluctant to do that if there's a plausible reason why we might not have to.'' Public schools, which account for about 40 percent of state spending, would see a funding increase of 16 percent if voters approve Brown's tax initiative. More money also would flow to the state's three higher education systems, which have been the subject of student and faculty protests as courses have been cut and tuition has soared in recent years. Democrats who control the Legislature said they would cut as much as they can while trying to preserve what they CHICAGO (AP) — Hoping to get in on Face- book's hotly anticipated public stock offering? You'll need Facebook friends at very high levels — or a lot of money. Most people who like the idea of owning Facebook's stock will have difficulty getting it at the offer price, currently expect- ed at $28 to $35 a share. Unless you know the right people at Facebook, you'll likely need to have a large, active account with one of the big banks or brokerage firms directly involved in the stock sale. Otherwise, you can take your chances by buying shares after the initial public offering is completed, when Facebook begins trad- ing on the Nasdaq Stock Market under the ticker symbol ''FB.'' That's likely to happen Friday. Doing it that way typical- ly means paying much more for the stock, however. And heavy demand skews the early stock price, leaving an investor vulnerable to the risk of a big drop. Jerome Cleary isn't deterred. One of a legion of Facebook fans, he has never wanted to own a stock as much as he wants to buy this one. Cleary, a standup comedian in Los Angeles, says he has already signed Brown acknowledged that the Democrats who con- trol the Legislature do not want to make more budget cuts, but he said doing so was unavoidable. ''Given the decade of fiscal disconnect, I've com- mitted to righting the ship of state and getting it into balance,'' Brown said. ''Otherwise, we borrow and sink deeper into debt.'' Facebook IPO shares tough task for small investors up for an account with a dis- count online brokerage so he'll be ready. ''I know you should buy stock in what you know and like,'' Cleary says. ''I feel that because they have an incredible mass of wealth and such growing populari- ty, the stock really may pay off.'' Facebook Inc.'s IPO is expected to be the largest ever for an Internet compa- ny. It's expected to raise as much as $11.8 billion for Facebook and its early investors — far more than the $1.67 billion raised in Google Inc.'s 2004 IPO. Analysts say there's so much interest in Facebook's stock that some underwrit- ers are closing their books as early as Tuesday. This means they won't be taking any more orders from poten- tial buyers. The IPO is expected to be completed late Thursday, with shares available for trading Friday. Scott Sweet, the owner of advisory firm IPOBoutique, says the high demand also means that Facebook might raise the per-share price above $35, the high end of the range Facebook current- ly expects. Facebook and the IPO's lead underwriter, Morgan Stanley, declined to comment.