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Gov. Brown reaches California tax deal with group for November ballot measure
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LONG BEACH (AP) — Gov. Jerry Brown said Wednesday that he has reached a deal with a rival group to combine forces on a November ballot initiative to raise sales and income taxes, a move that will allow Democratic-leaning interests to align behind a single, high-stakes budget proposition.

The governor told The Associated Press he is happy with the agreement he reached with advocates of increasing income taxes on people who make more than $1 million a year. Brown had been promoting a separate plan to raise the state sales tax and raise income taxes on people who earn more than $250,000.

He said working together provides a greater chance of success in November.

"It's the tax program that balances the budget, and that's the key," he told the AP after a news conference at a Boeing Co. facility in Long Beach. "Joining the forces creates a higher probability of victory, and that's good for school kids, it's good for public safety."

He would not discuss details but said his office would issue a news release about the deal later in the day.

Senate President Pro Tem Darrell Steinberg, D-Sacramento, laid out details of the proposed compromise. They include reducing the proposed four-year sales tax to a quarter-cent instead of a half-cent, as Brown had proposed, and increasing the income tax rates by as much as 1 percentage point higher than Brown had sought. The income tax also would last seven years rather than five years as Brown had proposed. He said it would bring in $2 billion more than Brown's initial plan, or anywhere from $7.5 billion to $7.9 billion a year at its height.

"We were all very disturbed by the prospect of three separate measures, and that we were headed for a real collision course," Steinberg said.

Rick Jacobs, chairman of the Courage Campaign, which had advocated for the so-called millionaire's tax, said the group had always sought to work with the governor rather than against him.

"This is a victory for progressives and everybody who believes that the state of California needs to re-fund itself. The measure is more progressive in every way and we're very pleased about that," he said. "... It's going to cost a lot of money, but we can get this revised measure on the ballot. It can be done and from our perspective, it must be done."

Joshua Pechthalt, president of the California Federation of Teachers, said in a statement that the new measure "reduces the burden on working families and ensures a greater contribution from the 1 percent."

California Republican Party Chairman Tom del Beccaro slammed the compromise as a "backroom deal with special interests."

"Gov. Brown should be working with taxpayers and small businesses to craft a plan that would put Californians back to work, not finding ways to make it harder for hardworking people to participate in the economy," Beccaro said in a statement.

The compromise was reached after months of public sniping in which the governor urged other groups to drop their own tax proposals or risk having all of them fail in November. The proposals seek to address California's ongoing budget deficits — the current one is $9.2 billion — and provide stable funding for public schools.

Proponents face a short deadline in efforts to qualify a measure for the November ballot, however. Signatures that Brown and the millionaire's tax supporters had already gathered will not count toward a new measure, meaning they will have to start fresh and spend millions more to collect the 807,615 signatures needed for a constitutional amendment.

First, they must submit new language to the state attorney general's office, which must draft a title and summary. Steinberg said he hoped this could be expedited because the proposal was so similar to Brown's original initiative. The secretary of state's office must certify all ballot initiatives June 28, according to its website.

Brown acknowledged the tight timeframe but said "battles are never won without great exertion."

The proponent of a third tax initiative, Los Angeles attorney Molly Munger, is not part of the compromise. Addisu Demissie, campaign manager for the "Our Children, Our Future" initiative, said he did not have enough information about the deal between Brown and the teachers union to comment on it.

"We don't anticipate that it will change our plans. We have an open line of communication with the governor's office and we look forward to continuing the dialogue," Demissie said in an emailed statement Wednesday.

Munger's proposal would raise income taxes on a sliding scale for virtually all taxpayers and give the money directly to school districts.

Brown also faces a hurdle in trying to win support from California's business interests. The California Chamber of Commerce and California Business Roundtable both voted within the last week to oppose the millionaire's tax and Munger's proposal. They did not take positions on Brown's proposal, but Business Roundtable chairman Jerry Carnahan praised the governor's efforts.

"We recognize the governor's leadership to address the state budget crisis and as business leaders we are working to pass the economic reforms that will help get California back on track through increased private sector investment," Carnahan said in a news release last week.