Gov. Brown Still Wants Tax Vote

Sacramento - Gov. Jerry Brown said Tuesday that he still hopes to win a vote in the Legislature to ask Californians whether they want to extend increases to the sales, personal income and vehicle taxes to help close the rest of the state budget deficit, despite cutting off negotiations with Republicans last week.

The Democratic governor said he would prefer that approach to an independent ballot initiative. He ended talks with GOP lawmakers over his plan to hold a June special election on the taxes, saying time had run out to strike a deal.

Brown already signed $11.2 billion in spending cuts, mostly to social services, leaving the state with a $15.4 billion budget deficit. He said Tuesday that Californians of all political persuasions have no appetite for billions of dollars in further cuts.

"I think ultimately, from everything I can tell, people don't want to make drastic cuts. They don't want to gut the university, gut public education, weaken public safety," he said. "But under our system ... the only way to get tax extensions is Republican votes. We must get those four votes."

Democrats have wide majorities in the Assembly and Senate, but two Republican votes are needed in each house to reach the two-thirds threshold required for approving a ballot measure or tax increases.

Brown had hoped to have a vote before the July 1 start of the fiscal year, when the remaining tax extensions run out. He said it was unclear how soon a special election could be held, but pursuing an initiative by collecting signatures on a petition would likely take longer than trying to strike a deal in the Legislature.

The Legislature approved temporary increases to the three taxes in 2009, but all will expire by the end of June. Brown wants those tax increases renewed for another five years, bringing in about $9.2 billion a year.

The governor said he will present a balanced budget revision by his May 14 deadline, and it will be up to the state Legislature to decide whether to pursue honest cuts or accounting gimmicks to close the deficit.

Earlier this year, the nonpartisan Legislative Analyst's Office laid out the scope of cuts that would be needed to close a deficit of slightly less than the $15.4 billion deficit Brown still faces.

The cuts would include nearly $5 billion to K-12 schools, another $585 million to community colleges, $1.1 billion from universities, including a 10 percent student fee increase at California State University campuses, and $1.2 billion in cuts to health and social services.

The report also said state employee pay would have to be cut by another 9.2 percent, employee contributions to health care would have to rise by 30 percent, and $2.6 billion would have to be cut from criminal justice and public safety programs.

Brown also plans to tour the state in the coming weeks to push his message about the need for more tax revenue to avoid decimating longstanding programs that he said people rely on. He spoke to reporters Tuesday before addressing a meeting of the California Medical Association in Sacramento.

Brown said it's imperative that Californians understand the possible ramifications of an all-cuts budget, because many people, including lawmakers, still seem to think "something will turn up," instead of cuts or taxes to close the deficit.

"I don't think it's clear — because when I talk to some of the Republicans, they don't want to cut the university and they don't want to cut schools, but they don't want to extend taxes. So I think there is not yet a full understanding of what the true alternatives are," he said.

Brown had been negotiating with five Republicans in the Senate before he ended the talks. Those lawmakers wanted reforms to the public pension system, a firm cap on state spending in the future and regulatory changes that would help businesses in exchange for supporting a special election to extend the tax increases.

The governor pulled out of the talks after the Republican leadership presented him with a seven-page list of demands, which he said was unrealistic, but he said Tuesday that he had conversations with some Republicans over the weekend.

Meanwhile, Brown faces pressure from some of the groups that would be hardest hit by further cuts.

Three First 5 agencies from the Central Valley filed a lawsuit against the state on Tuesday, alleging that the budget bills Brown signed last month illegally transferred about $1 billion in tobacco tax funding intended for children's programs into the state general fund.

California voters approved Proposition 10 in 1998, adding 50 cents in taxes to each cigarette pack to help pay for health and education programs for poor children under age 5.

The leaders of California's university and community college systems also met with Brown at the Capitol on Tuesday for a meeting to press their case for continued funding.

"We estimate if there's an all-cuts budget that we will have to turn away 400,000 students in the next school year. That's not only a tragedy for those students, it's a tragedy for the economy of the state of California," Community Colleges Chancellor Jack Scott said.

University of California system President Mark Yudof said the state needs to continue investing in education that breeds entrepreneurship if it is to survive in the global economy.

"It's a state that's going to compete because of the smarts of its people, but not because we're a low-wage state or a low-tax state or a low-regulation state," he said.