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Cherry tree blossoms over the California State Capitol Building in Sacramento
Michael Warwick / Shutterstock.com
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By Ted O’Neil
(The Center Square) – A group of 25 California legislators is seeking to restore net operating loss deductions and business incentive tax credits in the state’s new budget.
The lawmakers laid out their reasoning in a letter sent to the chairs of the of the Assembly Budget Committee and Assembly Budget Subcommittee on State Administration.
The net operating loss deduction was suspended last year and the tax credits were capped last year to address a predicted budget shortfall. The proposal was meant to increase the state’s revenue by about $9.2 billion.
“We approved this action last year in order to close an estimated $54.3 billion budget deficit, which thankfully never came to fruition,” the letter reads. “However, California is not even close to experiencing a budget shortfall in 2021. In fact, California’s budget contains a record $22 billion in reserves with $15.6 billion in the state’s Rainy Day Fund.”
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