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.
The state comptroller estimates that Texas will generate $96.2 billion in general revenue in 2014-2015, a major jump in tax collection from the last two-year budget cycle.
Texas’ economy is humming again after lawmakers in 2011 wrote a cut-to-the-bone budget as the nation lurched out of the Great Recession.
At the time, unemployment in the state was the highest in a decade and the Legislature faced a $27 billion shortfall. But unemployment now is at a four-year low of 6.2 percent, sales tax receipts are skyrocketing and money is pouring into state coffers…
You all know what is coming, right? A bailout of states like California paid for by states like Texas. A massive federal government mediated transfer of wealth from the Lone Star State to La La Land is in the works. Wait and see.