A Tax Increase, By Any Other Name...

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As the two houses of the Legislature prepare to convene to debate, and supposedly approve, a new state budget... it's hard to avoid thinking about the concept of taxes, specifically because just about everyone's tax payments would go up under this budget. Sort of.

The details of the $104.3 billion general fund proposal are still trickling out of the Capitol, a reality in the era of deals that are begun in public but really nailed down behind closed doors.

A general overview can be heard in our reporting from this morning's edition of The California Report.

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But what's only become clear this afternoon is another scheme in the deal, one to accelerate the state taxes that are withheld out of almost everyone's paycheck... not just those who are self-employed.

This little gem would mean a bigger chunk taken out of paychecks for the first part of 2009 -- 10%, according to staffers -- with a subsequent drop in withholding payments later on. For some folks, this might mean a bigger tax refund come April.

Even so, it's quite the plan. As one legislative staffer brilliantly put it this afternoon, "we're collecting your taxes early."

The effect, for now, is to make 2008-09 state revenues look larger. But what about next year, you say? No problem. The "larger withholding early/less withholding later" is permanent. In other words, the state essentially gets money early every year, thus pushing the ultimate day of reckoning far off beyond the horizon.

This is in addition to another provision that has estimated tax payments being made earlier than they're currently due... and all of it is part of what legislative leaders on Sunday called "accelerated revenues."

These kinds of maneuvers speak volumes about how desperate the state is for cash, and how equally desperate legislators were to avoid an actual tax increase.

More on the budget deal later, both here and on the air.

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About John Myers

John Myers is senior editor of KQED's new multimedia California Politics & Government Desk.  He has covered California politics for most of the past two decades -- serving previously as Sacramento bureau chief for KQED News and, most recently, as political editor for KXTV News10 (ABC) in Sacramento. He moderated the only gubernatorial debate of 2014, and was named one of the nation's top statehouse reporters by The Washington Post. Follow him on Twitter @johnmyers.

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