(MENAFN) California's Gov., Jerry Brown, announced that the state's budget shortfall grew to an estimated USD16 billion, compared with USD9.2 billion in 2012's first month, reported AP.
Brown said that the increase was to some extent attributed to low tax collections, in addition to slow economic expansion, that came below expectations.
He added that in case voters didn't approve tax hikes in November, the state will impose harsh spending reductions to schools and public safety.
The Gov. also said that under his tax plan, the state would for the short term increase its sales tax by a quarter-cent and boost the income tax on people who make USD250,000 or more, expecting the tax initiative to raise USD9 billion in revenues.
It is worth noting that so far, in the current year, California's tax revenues have dropped USD3.5 billion below forecasts.
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