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California, whose economy is the largest in the nation and would rank ninth in the world if the state were a country, has struggled for decades with a tax system in which property tax increases are limited by law and tax hikes of any kind must be approved by voter initiatives or a two-thirds vote of the legislature.
High income and sales taxes produce plenty of revenue in good times but fall sharply in a recession, while spending on schools, prisons and medical care for the poor and elderly is hard to adjust.
The deeper deficit forecast reflects the state's uneven economic recovery: tax collections this year have fallen about $4 billion below projections...
http://wsau.com/news/articles/2012/may/14/brown-pushes-tax-hike-as-californias-money-woes-deepen/
High income and sales taxes produce plenty of revenue in good times but fall sharply in a recession, while spending on schools, prisons and medical care for the poor and elderly is hard to adjust.
The deeper deficit forecast reflects the state's uneven economic recovery: tax collections this year have fallen about $4 billion below projections...
http://wsau.com/news/articles/2012/may/14/brown-pushes-tax-hike-as-californias-money-woes-deepen/