California Governor Establishes Tax Review Panel

California Governor Arnold Schwarzenegger (R) yesterday signed an executive order establishing a 12-member panel to review the state’s tax code. Schwarzenegger specifically cited the swings in tax revenue caused by heavy reliance on capital gains income:

General Fund revenue over the last several decades has fluctuated dramatically due to changes in the economy in general, but primarily as a result of the volatility that is inherent in California’s current tax system[….]

[T]his fluctuation in General Fund revenues creates difficulty in funding the operations of government year-to-year, as the need for state services such as operating state parks, operating state prisons, overseeing elections and providing funding for healthcare and social services do not change in response to revenue, but in relation to population, demographics and service availability[….]

The panel will be comprised of 6 members including the chair appointed by the Governor, three by the Assembly Speaker, and three by the Senate President Pro Tem. The commission must provide its report on or before April 15, 2009.