Some proposed solutions to $34.8 billion deficit

Wednesday December 18, 2002

SACRAMENTO (AP) Here's a snapshot of some of the proposals that have emerged to help fill a state budget shortfall that is now expected to reach $34.8 billion over the next 18 months:

Taxes: Several Democratic lawmakers have called for tax increases that include increasing the state's car tag tax, or vehicle license fee, tacking a nickel-a-drink sales tax on alcoholic beverages, raising sales taxes by a half-cent or expanding sales taxes to services, and increasing taxes for the state's wealthiest residents.

Cuts: Gov. Gray Davis has proposed $10.2 billion in cuts that would be enacted immediately but would span the next 18 months. They include deep cuts to education, health and welfare services and the state payroll. Among them, he has called for the elimination and stricter eligibility requirements for some Medi-Cal recipients, a 3.6 percent across-the-board cut to K-12 schools and community colleges and cutting $470 million from the state's payroll.

College fees: The boards of the California State University, the nation's largest public university system, and the University of California voted Monday to hike student fees in anticipation of millions of dollars in cuts in state spending.

Spending Limits: Republican lawmakers are calling for a state constitutional amendment that would limit growth in spending.

Economic Development: GOP legislators also are proposing measures to lure business to the state and boost economic development, including extending a tax credit for manufacturers and shrinking workers' compensation benefits.

(Copyright 2002 by The Associated Press. All Rights Reserved.)