Back in February Gov. Schwarzenegger and the legislature passed a state budget that included a temporary one-cent hike in the state sales tax, well now the time has come to pay up. On April 1st the one-cent-on-the-dollar increase will take effect and will expire on either July 1, 2011, or July 1, 2012 depending on voter’s approval of the proposed Budget Stabilization constitutional amendment in a statewide election to be held on May 19, 2009.

If Proposition 1A, also known as the Spending Cap Amendment passes on May 19th, more than sales taxes will be raised. Expect to see an additional 5% surcharge on state income taxes, an increase in the vehicle-license fee from 0.65% to 1.15%, $15 billion reduction in government spending, including $8.6 billion from education, and an elimination of two state holidays for state workers to enjoy. The deal also includes automatic spending restraints and new powers for governors to cut programs whenever the state falls into the red. If passed it would raise more than $5 billion per year. So far, no coordinated opposition has formed against 1A, but labor unions are discussing whether to mount an attack against the proposition.

Now we all get to pay for the mistakes our legislators have been making over the years. For years and years out state legislators have tried to fill budget gaps buy borrowing money in bonds, but now the state is in such a financial mess with lots of debt and a downgraded bond rating to the lowest in the nation that they have no choice but to get their house in order to attract investors.