S&P: California recovers growth with tax increases

Sep 15, 2014 1:43 PM by News Staff

SACRAMENTO, Calif. (AP) - A new study says rising income inequality has led to slowing tax revenue growth in California. But it found the state has regained some of that loss using tax hikes.

The study released Monday by credit rating agency Standard & Poor's found that California's average sales tax revenue growth fell from nearly 11 percent in the 1950s to a low of 3.4 percent between 2000 and 2009.

Since 2009, the state has recovered some of its growth to 7.2 percent.

Last month Gov. Jerry Brown suggested that Democratic policies are helping to combat the wealth gap, including his 2012 temporary tax increase.

His Republican challenger, Neel Kashkari, has criticized the state's high poverty rate.

Nationally, the report says the rate of state tax revenue growth has halved, challenging state governments.

Copyright 2014 The Associated Press. All rights reserved.


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