The truth is, Sacramento is awash in cash. The Legislature’s budget analyst estimates that this fiscal year will end with $3 billion more than anticipated and, by 2017, state reserves may even top $11 billion.
For the political ruling class, this is an embarrassment. Last summer, the Governor called a special session of the Legislature in an attempt to secure legislative approval of a new health care tax on managed care organizations (MCOs) because the current tax is about to expire. He also called another special session to deal with transportation funding. In both cases, Republicans in the Legislature are making trouble for those backing new taxes by pointing to the obvious: The state already has plenty of money.
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