To the editor: California's budget is dependent on the capital gains tax, described as a giant bet on the stock market. With the stock market reaching record highs this past year, we had a record high budget, including a $4-billion surplus. ("California officials eyeing stock market plunge, hope it won't last," Aug. 24)
However, due to our state's unhealthy reliance on residents' capital gains tax revenue, a volatile stock market can wreak havoc on the state budget. Rather than continue to be a victim of the market's ups and downs, the Legislature needs to consider reforming our tax code and increasing our savings.
The state currently has $3.5 billion in its rainy-day fund, or roughly 3% of the general fund. We must be better prepared for the next economic downturn, and the Legislature needs to start saving more.
Our budget cannot continue to be held hostage by Wall Street gains and losses.
Assemblyman Scott Wilk (R-Santa Clarita)