State

Brown says he is getting support for tax plan

Wednesday, December 28, 2011
California Governor Jerry Brown

Gov. Jerry Brown said Tuesday that he is working to win support from business and labor leaders for his plan to ask voters to raise income taxes on high-income earners and increase the state sales tax, despite competing initiatives from liberal interest groups that say his plan hits working people too hard.

The Democratic governor talked about his 2012 ballot proposal during an interview with reporters on Tuesday. He said the key to winning about $7 billion a year in additional revenue is persuading voters that it's necessary to stabilize California's budget and that the "leadership of California" is behind it.

He said if voters reject the temporary tax increases, "the cuts will be very, very drastic. They're going to be unpleasant any way you look at it."

California faces a $3 billion midyear revenue shortfall and is expected to face a $10 billion deficit in the fiscal year that begins July 1, resulting in a $13 billion gap over the next 18 months. Brown will release his proposal for the next budget year by Jan. 10.

He wants to raise income taxes on a sliding scale, starting with individuals who make more than $250,000 a year, and boost the statewide sales tax by half a cent. The higher taxes would expire in 2017.

Liberal groups are circulating competing ballot initiatives that would impose even higher taxes on the rich and set aside money only for schools. The governor said he hopes to persuade them to rally behind his plan, which he thinks strikes the right balance.

Voters often reject initiatives when they are confusing or when too many of the same type are on the ballot.

"The liberals don't like the sales tax. More conservative people don't like to keep raising the income tax," Brown said. "But I think for the next four or five years it's the most likely to pass. It's reasonable, particularly with all the concern about the growing inequality, and I also think everybody has to be part of the solution."

Brown said business leaders with whom he has spoken have voiced support, as have some wealthy political donors.

"I did find that in talking to very wealthy people, they don't get overly excited about increasing their taxes," with some exceptions, he said. "I talked to Rob Reiner, he was very excited about paying more taxes, and I talked to a few others. But generally, they're more willing to tolerate it than embrace it."

Reiner, a Democrat, has put his money behind previous ballot measures to raise money for schools and early childhood programs. At one time, he flirted with the idea of running for the state's highest office and was a vocal critic of former Republican Gov. Arnold Schwarzenegger.

California Republican Party Chairman Tom Del Beccaro criticized the governor in a news release sent before Brown's Tuesday interview, saying the governor had wasted his first year in office and lost credibility with voters. In particular, he criticized Brown's attempt to extend previously approved increases to the sales, income and vehicle taxes. Those temporary increases were approved in 2009 but expired this year after Republicans refused to continue them.

"He threatened Californians with the fiscal nightmare of draconian cuts to education and services if we didn't adopt his poorly conceived, and economically bad, tax increases," Del Beccaro said.

(Copyright ©2014 by The Associated Press. All Rights Reserved.)

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