Jerry Brown says budget talks hit a new snag

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Gov. Jerry Brown said Tuesday that budget negotiations have hit a snag over the issue of extending current sales and vehicle tax rates until voters have a chance to decide on them later this year.

Those taxes are set to go down on July 1, but Brown wants to keep to current higher tax rates in place for three months, with the public weighing in this fall. Republican lawmakers want to let the taxes roll off as scheduled and be re-raised if voters give the OK.

“What’s going on now is the Republicans are saying that we have to cut for three to four months before this election … and that doesn’t work,” Brown said.

Sen. Bob Huff, the ranking Republican on the Senate Budget Committee, confirmed that the temporary taxes remain the major sticking point.

‘I would say that’s a fair characterization. There’s no Republican votes for a temporary tax.’

Brown said he and Republican lawmakers are close to a budget deal that would include changes to the state pension system, a temporary limit on state spending and streamlining of some regulatory reforms. The linchpin of the deal is a five-year extension of higher sales and vehicle taxes, and an increase in sales tax that voters would be asked to weigh in on this fall.

A handful of Republicans have been talking to Brown for weeks about a budget compromise. They have been adamant that any deal include changes to environmental rules, pensions and limiting state spending, and that any tax extension or increase occur only after a public vote.

“We’re very close on all those issues,” Brown said. “We’re not even arguing over these things. Right now, this tax question is the sticking point.”

Huff said Democrats should look for other ways to cover the new multibillion-dollar hole in Brown’s proposal if the taxes are allowed to roll back on July 1. ‘There’s ways to get more revenue, or they can take some more cuts,’ Huff said. ‘There’s a lot of different things they can do. It’s not our responsibility to find those things.

Brown suggested Tuesday that Republicans were being unreasonable, noting that his budget already includes billions in cuts to state services, and that the deal being discussed includes major policy changes that Democrats oppose. “They’re going to get their pound of flesh,” Brown said.

Brown said if Republicans refuse to budge on the issue, it could endanger the entire tax-election plan. “If we don’t get that bridge tax, it’s pretty much the budget goes to all cuts,” he said.

Despite billions in cuts and spending reductions already signed into law, the state still faces a budget deficit of roughly $10 billion. Brown wants to fill most of that gap with temporary increases in sales and vehicle taxes, and an increase in the income tax next year.

-- Anthony York in Sacramento