Newsom is suggesting two changes this year to the way the state saves money for leaner times. California鈥檚 Legislative Analyst鈥檚 Office, the research arm of the legislature, said the changes are good, but he should be asking for more.
Newsom said in his budget proposal earlier this year he wants to do two things: first, make funds the state puts into savings not count as spending, so California doesn鈥檛 exceed its spending limits when it saves.
The second: change the size of the account those funds go into 鈥� it currently caps savings at 10% of general fund taxes, and he wants to raise it to 20%.
The LAO saying he should push that to 50%, but do it gradually.
鈥淐alifornia's revenues are volatile,鈥� said LAO Chief Deputy Carolyn Chu. 鈥淚n part, that reflects the preference of the voters that have approved more progressive income taxes that levy higher rates on individuals whose incomes are more prone to fluctuate.鈥�
She also said changing the size is just the beginning.
鈥淭hen you need a way to fill that bigger bucket with additional revenues,鈥� she said.
The report suggests the state put more money away in lucrative revenue years or set more aside in capital gains taxes.
The legislature is with Newsom鈥檚 proposals to save more money but it hasn鈥檛 had a hearing yet.
If lawmakers approve the measure, it鈥檒l go to voters next.