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Jerry Brown's tax deal may go nowhere

September 8, 2011 |  6:55 pm

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This post has been corrected. See note at the bottom for details.

Gov. Jerry Brown on Thursday rushed in front of reporters to do something he hasn't been able to do in his nine months in the office -- stand with Republicans and announce a tax deal.

The only problem is that he didn't have enough Republicans to guarantee the $1-billion deal, which could lead to an effective tax cut for millions of Californians, will pass the Legislature in the final days of the session. The measure stalled in its first vote in the Assembly on Thursday evening, and its fate in the state Senate was uncertain.

"We celebrate small victories," Brown told reporters. "We're not quite over the finish line yet."

For weeks, Brown has been trying to get four Republicans to support his plan to restructure the state's corporate tax code and remove a provision that rewards big companies that have workforces out of state.

He first tried during the budget debate this spring to get Republican support to use the money to plug the deficit. No luck. He repackaged the provision as a jobs program, with the savings used for additional business tax breaks. No luck.

But on Wednesday night, Brown cut a deal with Assembly Democrats and two Republicans there to split the savings between tax cuts for businesses and a $1,000 increase in the standard deduction for California taxpayers.

Seventy percent of the money would go to businesses through a variety of changes, including a 4%  reduction in sales tax on manufacturing equipment and a break on taxes for small corporations that file as individuals.

Brown stood with Assemblyman Nathan Fletcher (R-San Diego) -- a mayoral candidate who can benefit from appearing bipartisan -- and Assemblyman Cameron Smyth (R-Santa Clarita), who, along with all 52 Democrats in the lower house, would him the needed two-thirds vote to get the bill through the Assembly.

But reactions in the Senate were cool. The Republican leader there, Bob Dutton, put out a statement dismissing the deal and demanding that the governor call a special session to deal with jobs and the economy. Even some Democrats were skeptical.

Negotiations were ongoing Thursday evening to pick up Senate support.

Related:

Brown, Assembly reach tax deal

Brown optimistic on bipartisan deal

Brown seeks last-minute tax deal

-Anthony York in Sacramento

[For the Record, 7:27 p.m., Sept. 8: An earlier version of this post incorrectly said that the Assembly passed a tax deal. The measure stalled in its first vote in the Assembly on Thursday evening.]

Photo: An animated Gov. Jerry Brown at a press conference earlier this year. Photo Credit: Justin Sullivan/Getty Images

 

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