Some idiot Democrat legislator was floating the idea of "temporarily" bumping the sales tax to 10%. The bozos in Sacramento don't understand that the main reason our once thriving aerospace industry fled the state was over-taxation and over-regulation. Gray-out Davis' energy policies have caused many companies to re-think their decisions to locate facilities in California.
You got to understand that for a tax-&-spend legislator, when the income tax revenue doesn't come in and the property tax levels are fixed, the only choice they can see is to raise sales tax! Sure, economic theory says that there is price elasticity and that as you increase the price (say by increasing taxes) less of it will be purchased and that can translate into less employement and less business tax revenues and less sale tax revenues, but hey, people elected to govenment office don't need to understand economics.
That is why folks like Moody's rate the bonds of government agencies. Moody's tells the world how well a government agency can repay its debts and provides the tax-&-spend legislators with feedback on what they are doing to their economy.