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Brown says he is getting support for sales tax & tax-the-rich plan

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POSTED December 27, 2011 7:49 p.m.

SACRAMENTO (AP) Ñ 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 groups that say his plan hits working people too hard.

The Democratic governor talked about his 2012 ballot proposal during an interview with reporters. He said the key to winning about $7 billion a year in additional revenue is persuading voters that it's necessary to stabilize the state'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 interest 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.

Brown, dressed casually in a green sweater, took questions for nearly an hour from more than 20 reporters and photographers who crowded around a large wooden table in his Capitol office. He said despite the political gridlock in the Capitol and the state's annual budget deficits, he is enjoying the intellectual rigor of the job.

"So far it's pretty exhilarating. I mean, I can't tell you how much I like being governor of California," Brown said. "I was telling my wife the other day, 'I like being married, I like living in my house, I like being in Oakland, I like coming to Sacramento to do whatever I have to do here.' So whatever you write or what they do here (in the state Capitol), I'm still going to enjoy it and I will continue at it."

At one point, the governor's Welsh corgi, Sutter, who usually roams the spacious offices where Brown and his staff work, let out a bark from another room as the governor fielded questions.

While Republican critics say the governor squandered his first year, Brown noted that he vetoed a budget he did not find credible, forced deep cuts to state programs to rein in spending, cut the state's $26 billion deficit in half and helped raise California's credit rating.

He also spearheaded a realignment of services from the state level to counties, including a change that is sending thousands of nonviolent offenders to county jails instead of state prisons. He also shifted responsibility for medical care for the elderly and other social programs to counties.

A provision of his tax proposal would permanently shift money from the state budget to counties to help pay for those ongoing costs.

Brown also offered his view on a host of other issues facing state leaders:

¥On the $98 billion proposal for a high-speed rail line throughout the state: "I believe California is a leader. It's a leader in energy, it's a leader in medical research, it's a leader in venture capital, and I'd also like to see it be the leader in high-speed rail. I'm not a 'declinist' that thinks California's in decline."

¥On whether he would support pulling the $11 billion water bond off the November ballot: "I'm open to anything that makes sense, and big bond measures are difficult at this point in time, particularly when the ballot will be crowded, and I'll take a look at that. But I don't want to prejudge the water policy." Brown said he will have a comprehensive water policy proposal in 2012.

¥On education reform: Brown said he will convene a "panel of thoughtful people on education," with a broad spectrum of views, to discuss how to fix California schools given the state's limited money. "While I want to make things better, I don't want to fall into the trap of reform for the sake of reform. Education is hard sledding. ... There's not a quick fix here."

¥On broader tax reform: "There are people who say that services, obviously, are something people ought to look at, but then you look at, 'Do you want to tax cell phones and pilates classes?' You get a very resounding response."

¥On his expectations for negotiations with GOP lawmakers, who last spring rejected his proposal to ask voters to raise taxes: "I didn't know exactly, when I started, how the Republicans would respond. I did think that asking voters to vote on a tax was profoundly different than raising a tax. It turned out that those two notions are conflated in the Republican mind, so they cannot vote for that."

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