Tax hikes and spending cuts produce surpluses in the states
Only a year and a half ago, the usually brimming California treasury had sprung a leak. Reeling from the revenue losses caused by Proposition 13 and brutalized by the recession, California was facing a deficit of $500 million. The state took drastic measures. It cut or froze social programs across the board and shrank its work force by 4,000. Energy spending was cut back sharply. Tax loopholes were plugged. Today, with its revenues buoyed by the recovery, California expects a budget surplus of anywhere...
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