Hollywood apparently isn’t the only place in California where creative accounting is known to take place.
State officials were recently embarrassed to discover a $2.3 billion gap between what the state controller’s office had calculated was sitting in hundreds of special funds, and figures reported by the Department of Finance. At least 17 fund accounts appear to show discrepancies, according to the
Governor Jerry Brown and the California legislature used the Finance Department’s lower figures, which amount to $8.8 billion less than the individual departments’ numbers, in the budget they approved last month, a budget that incidentally includes a large tax hike.
According to the official budget, there is a $15.7 billion deficit. To balance it, the budget relies on $8.5 billion in new tax revenues, from a quarter-cent sales tax hike for four years, and a seven-year increase in income taxes on taxpayers who earn over $250,000 a year. But voters will need to approve the tax hikes on the ballot in November in order to balance the budget. But with the budget numbers now looking suspect, tax-averse Californians are going to need a lot of convincing.
