Moving swiftly to save hundreds of millions in state funding for public transit projects, the Legislature struck a deal Monday with Gov. Arnold Schwarzenegger and approved millions in tax breaks for two groups whose fortunes are tied closely to the state's economic recovery homebuyers and green-technology manufacturers.
By delivering the tax breaks which were blessed in uncommonly strong bipartisan votes lawmakers ensured the governor would reverse him and sign $1.1 billion in budget fixes sent to his desk last month. Those fixes involved a complex shuffling of fuel taxes meant to reduce the state's $20 billion deficit while pouring more cash into public transportation.
The deal reached Monday provides $200 million in new tax credits for homebuyers, to be split evenly among those buying a home for the first time and anyone buying a newly constructed home. Anyone qualified who makes a purchase between this May and August 2011 will receive a credit for 5 percent of the home's purchase price, up to $10,000 over three years.
Additionally, companies that make "green" technology products like solar arrays and electric cars will be freed from having to pay any sales tax when purchasing their manufacturing equipment over the next 10 years. The proposal is meant to drive hundreds of millions of dollars in new manufacturing to California, including Silicon Valley.
Both exemptions will take effect as soon as the governor signs them, which he is expected do after stumping for them up and down the state recently. "The package of bills as written will provide significant benefit to the state's general fund and will help put Californians back to work."
The green-tech tax credit won't affect this year's budget, according to the Department of Finance, since it's meant to attract investment that hasn't yet materialized.
A third bill sent to the governor included technical changes to the gas-tax swap, ensuring that commuter rail lines and transit agencies didn't see a spike in diesel prices. The governor's fuel-tax plan would have eliminated state transit funding by shifting the state's sales tax on gasoline to a special excise tax, in the process giving consumers a 5 cent tax cut on each gallon of gas. The governor was upset that Democrats tweaked that plan to eliminate that reduction in favor of increasing transit money.
By delivering the tax breaks which were blessed in uncommonly strong bipartisan votes lawmakers ensured the governor would reverse him and sign $1.1 billion in budget fixes sent to his desk last month. Those fixes involved a complex shuffling of fuel taxes meant to reduce the state's $20 billion deficit while pouring more cash into public transportation.
The deal reached Monday provides $200 million in new tax credits for homebuyers, to be split evenly among those buying a home for the first time and anyone buying a newly constructed home. Anyone qualified who makes a purchase between this May and August 2011 will receive a credit for 5 percent of the home's purchase price, up to $10,000 over three years.
Additionally, companies that make "green" technology products like solar arrays and electric cars will be freed from having to pay any sales tax when purchasing their manufacturing equipment over the next 10 years. The proposal is meant to drive hundreds of millions of dollars in new manufacturing to California, including Silicon Valley.
"Green technology is California's present and its future"
Both exemptions will take effect as soon as the governor signs them, which he is expected do after stumping for them up and down the state recently. "The package of bills as written will provide significant benefit to the state's general fund and will help put Californians back to work."
The green-tech tax credit won't affect this year's budget, according to the Department of Finance, since it's meant to attract investment that hasn't yet materialized.
A third bill sent to the governor included technical changes to the gas-tax swap, ensuring that commuter rail lines and transit agencies didn't see a spike in diesel prices. The governor's fuel-tax plan would have eliminated state transit funding by shifting the state's sales tax on gasoline to a special excise tax, in the process giving consumers a 5 cent tax cut on each gallon of gas. The governor was upset that Democrats tweaked that plan to eliminate that reduction in favor of increasing transit money.
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