The BoE has released its 2007-08 Annual Report that breaks down the $53.1 billion in revenue collected by the BoE in year ending June 30, 2008.  The BOE collected approximately $700 million less than the previous fiscal year, a decrease of 1.3 percent. 

It is clear the economy was getting softer in the first half of last year and that retail sales were declining even more than other revenue categories.  In light of this, February’s decision to raise the sales tax by one percent was a punitive and destructive decision.  The Governor and legislators that signed off on it claimed raising the sales tax would bring in $6 billion more in revenue, despite the dynamic revenue analysis of the BoE’s chief economist showing that a one percent increase in the sales tax would suppress sales and bring in half a billion dollars less than estimated (and over 50,000 jobs lost).  Raising the tax in the beginning of a recession will likely prove even worse than this prediction.

It is hard to say what should make the taxpayers angrier:  Sacramento ’s view of people who work and spend to be magical ATMs, or the conscious decision to make things even tougher for no good reason. The political class’s insatiable appetite for clientele regardless of the cost and damage to the economy is staggering.