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Republicans reject Democrats' latest budget offer

August 3, 2010 |  4:12 pm

After a series of false starts and leaked details, Democratic leaders in the Assembly and Senate unveiled their comprehensive plan for solving the state's budget gap. And through it all, the Republican position on the Democratic proposals has remained unchanged. In a word: No.

The latest proposal from Democrats contains a plan to increase personal income taxes and vehicle registration fees. In exchange, the state sales tax would be lowered from 6% to 3.5% by July 2011.

Republicans weren't buying it.

"It doesn't work," said Senate Republican Leader Dennis Hollingsworth (R-Murrieta). "It amounts to a massive tax increase on working families in California."

Assembly Speaker John A. Pérez (D-Los Angeles) said Republicans have displayed "reprehensible behavior" in refusing to negotiate. "Legislative Republicans have been AWOL," Perez said.

Assembly Republican Leader Martin Garrick (R-Solana Beach) said the tax swap was unacceptable. By his estimates, 62% of taxpayers who do not itemize deductions on their income tax forms would wind up paying more taxes.

Democrats insisted the effect would be a net tax decrease for all tax brackets, with the federal government picking up much of the tab, since state income taxes and vehicle fees are deductible on federal tax forms.

Democrats also called for suspending the constitutional guarantee for schools. But they say the $52 billion-plus they've set aside for schools is more than $3 billion above the school spending proposed by Gov. Arnold Schwarzenegger.

-- Anthony York and Shane Goldmacher in Sacramento