(Reuters) - California's governor is betting the wealthy will grow wealthier still to help right his state's finances, a wager that is expected to help the budget in the short term, but leaves it at risk of a revenue slump if assets such as stocks lose value.
Democratic Governor Jerry Brown sees a budget surplus within reach, in contrast to the deficits that have bedeviled the state for the past decade, in part due to new revenue from increases in income tax rates on the wealthy approved by voters in November.
"The higher reliance on personal income tax is a double-edged sword," Offerman said.
When financial markets do well, the most populous U.S. state's wealthy do well and that helps fill its coffers because they provide the lion's share of the revenue from personal income taxes.
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