SACRAMENTO
April 27, 2010 11:03am

But spending cuts would not offset the slash in revenue, leading to further budget problems for the state, says David Kersten, founder of Kersten Communications in Sacramento, a public policy research and analysis company that specializes in budget, tax, and fiscal issues.

“When the state’s in a $20 billion deficit, you can’t propose tax cuts on this magnitude when we can’t even pay for what we have right now,” says Mr. Kersten. “Voters should be careful. If it sounds too good to be true, it probably is.”(David Kersten talks about what he found in his analysis in a CVBT Audio Interview. Please left-click on the link below to listen now or right-click to download the MP3 audio file for later listening.)

Both the Poizner and Whitman tax cut plans would increase the state’s structural $20 billion budget deficit by more than $10 billion a year, according to the analysis.Spending cuts to offset that would essentially dismantle state government, Mr. Kersten contends.  He says both tax plans would provide “very marginal” economic benefits to the state at best and only really serve “to benefit the wealthy and ultra rich.

”He contends both candidates “would reap significant savings, likely to be in the millions of dollars range, potentially tens of millions of dollars, in their own tax bills from their proposed reductions in the state capital gains tax.” 

Drilldown