2009-10 California State Budget

I read in the news that proposition 1A through 1E were defeated in the California special election yesterday. I'm not sure what Arnold and the rest of the legislator were thinking. Did they actually think people were going to vote for more taxes at this time? What a waste of money.

Since I basically do budgeting for a living, I wanted to take a look at the budget proposal. Supposedly there is a $42 billion shortfall on a budget of $135 billion. What kind of idiots submit a budget where the deficit is ~45% of the expected revenue? To quote our CFO, they're "spending money like a bunch of drunken sailors!"

The budget summary PDF file is 175 pages so it will take some time to read but there's an interesting chart on page 69 in the Revenue Estimates section. I'll need to figure out how to cut out the chart but here's the accompanying text:

Modeled closely on the federal income tax law, California’s personal income tax is imposed on net taxable income: that is, gross income less exclusions and deductions. The tax is steeply progressive, with rates ranging from 1 percent to 9.3 percent. Figure REV‑03, which shows the percent of total returns and tax paid by adjusted gross income class, illustrates the progressivity. In 2006, the top 15 percent of state taxpayers, those with adjusted gross incomes (AGI) over $100,000, paid 84 percent of the personal income tax. The top 1 percent of state taxpayers, those with AGI over $480,940, paid 48 percent of the personal income tax. Changes in the income of a relatively small group of taxpayers can have a significant impact on state revenues.

So I fall into the >$100k category, along with most of the people I work with. We're already paying a huge portion of the personal income taxes, which makes up ~50% of all tax revenues. From the chart, people making <$50k (~65% of the population) pay zero state income tax. How is that fair? Don't they consume state government resources? I paid ~$25k in state taxes last year, not counting sales tax on stuff I bought. I'm 100% positive that I didn't cost the state of California anywhere near that much.