A little known new accounting rule buried in the fiscal 2012-13 California state budget now will make it virtually impossible for the public to track where and when the tax revenues from Propositions 30 and 39 will be spent. Prop. 30 is Gov. Jerry Brown’s $6 billion tax increase. And Prop. 39 is hedge fund manager Thomas Steyer’s $1 billion tax increase. Both propositions were passed by voters on Nov. 6.
The new budget rule is Section 35.50 of the Budget Act of 2011-12, also known as Assembly Bill 1495. The new rule authorizes a shift from cash (actual) accounting to an accrual (projected) accounting method. What this murky rule means is that budget revenues from two years can be applied to one year’s worth of expenses. The result will be an inflated and non-transparent budget.
Source: California Watchdog. Read full article. (link)