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California revenue declines since passage of Prop 30

High Income earners flee the state after passing of Prop 30.
High Income earners flee the state after passing of Prop 30. examiner.com

After Proposition 30 passed on November 6, 2012, the State of California experienced a decline in the total state revenue for the month of November. California State Controller John Chiang reported that the total revenue for the month of November declined by $806.8 million, which is 10.8 percent below budget.

The State of California experienced a decline in its revenue as several of the high income earners have relocated to other states, and have also relocated their businesses out of state. This led to a decline in corporate and income tax revenues by more than $1 billion.

With the expected increase in revenue to be derived from the passing of Prop 30, state bureaucrats increased deficit spending beyond the state’s $6 billion annual tax increase. The Department of Developmental Services and the Department of Health Services increased its spending in November by over $1 billion in comparison to its spending last year.

As a result of the decline in tax revenues collected, and the increase in spending, California’s deficit increased to $27 billion for the first five months of this fiscal year.

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