May 12 (Reuters) - California is facing a much deeper budget deficit than expected due to weak tax revenues and slow progress in cutting sp ending, Governor Jerry Brown said on Saturday.
Brown said the shortfall for the state’s 2012-2013 fiscal year now stands at $16 billion, up from a previous estimate of $9.2 billion made in January.
“We are now facing a $16 billion shortfall, not the $9 billion we thought in January,” Brown announced in a video posted on YouTube. “This means we will have to go much further and make cuts far greater than I asked for at the beginning of the year.”
Brown is due to present a new budget proposal for the next fiscal year on Monday. I n it, Brown will outline proposals for eliminating the deficit.
The state is still recovering from the 2008-2009 financial crisis that induced the worst recession since the 1930s. In April, California’s tax revenues came in $2.44 billion below the state’s estimate, largely due to weaker-than-expected revenue from personal income taxes.
Referring to spending cuts, Brown said “unfortunately our work is not finished.”
“The federal government and the courts have blocked us from making billions of necessary budget reductions,” Brown said.
California is expected to raise $7 billion in new revenue if voters approve a ballot measure in November that would increase the state tax rate on earnings above $250,000 and the state sales tax.
California could well receive a windfall from the planned initial public offering of online social media firm Facebook, which is aiming to raise as much as $12 billion. Revenues from stock options held by people living in California could reach around $2 billion, according to analysts.
The company is expected to reveal its final pricing on Thursday for what would be Silicon Valley’s largest market debut, then begin trading on Friday.