So when the Legislature decided to take more money out of your pocket to fix the state budget in February, they got out their calculators and plugged in higher tax rates. Their calculators told them they would get more money. Despite the fact that I, and others, were shouting from the rooftops that higher costs affect consumers’ behavior and they would not get the revenues they said they would, they went ahead and raised the Sales and Use Tax by 14 percent.
I just got the rough totals for April, the first month of the increase, and sales tax revenue is down 12% from last year. And even more dramatic, the revenues are 7% below the estimates made by the government less than two months ago when the big budget and tax increase deal was adopted. Tax increases again seem to exacerbate the effects of a declining economy. I will have much more on this next week, but I see no justification for extending this harmful tax increase by voting for Prop 1A.