Two of the country’s biggest states revealed starkly different fiscal pictures this week, with California’s leaders saying years of record surpluses are over, even as Texas officials gloated about their historic surfeit of cash.
California Gov. Gavin Newsom revealed a $22.5 billion deficit as he unveiled his preliminary budget proposal for the state on Tuesday — a dramatic reversal from a massive $100 billion surplus the state forecast just last year.
In Austin, meanwhile, Texas Gov. Greg Abbott told lawmakers that he had never been more excited at the opening of a new legislative session, because of the record $33 billion surplus the state is projecting.“Not every state can say what we can say,” Abbott boasted. “As we sit here today with a budget surplus of $32.7 billion dollars, California has a budget deficit of more than $20 billion dollars.
In Sacramento, Newsom defended California’s progressive tax code, which taxes people with large incomes at much higher levels than low-earning residents, as “more fair” than alternative approaches.Texas, on the other hand, has no income tax at all — instead relying heavily on sales tax revenue. Newsom insisted that the result of this approach is that most Texans pay more in taxes than Californians do. His staff cited a news report relying on data from several years ago to back up this claim.
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