California lawmakers approved a $1.7 billion, three-year tax-cut package early Saturday, capping a flurry of activity in the final hours of the Legislature's 1997 session.
All sides in the negotiations were quick to hail the so-called "megadeal" struck in Sacramento. California Senate Pro Tempore Bill Lockyer praised the deal as "the most significant tax cut for working Californians ever."The deal reflects California's resurgent economy, which only four years ago was among the slowest-growing in the nation. Recent projections show the state taking in more than $2 billion in new revenue next year, giving lawmakers the necessary cushion to make the tax cut fiscally viable.
Also included in the package were a $450 million infusion for cash-strapped counties and a 3 to 6 percent pay raise for state employees - their first in four years.
The bulk of the tax cut would come from increasing the dependent exemption credit, which allows taxpayers to subtract $68 from their tax bill for each child living with them.