Jerry Brown to pitch tax plan to voters
In the latest proposed fix for California’s fiscal crisis, Gov. Jerry Brown is expected to announce a multibillion-dollar tax initiative in the coming days, asking voters to raise levies on upper-income earners and increase the state’s sales tax by half a cent.
The levies would expire at the end of 2016, said sources with direct knowledge of the plan. The governor's office has been fine-tuning the tax measure for weeks with its labor allies. It hopes to file language with the attorney general's office as early as Friday so it can start gathering the signatures needed to place the measure on the November 2012 ballot.
The proposal comes as a host of groups race to qualify tax measures for next year’s ballot, all aimed at preventing deeper cuts to state services. Democrats hope the governor’s backing will help clear the field and avoid a tax glut on the November ballot.
After the state enacted an austere state budget this year, the nonpartisan Legislative Analyst's Office said California is likely to be $3.7 billion short of balancing its books in the current fiscal year. That probably will trigger a new round of reductions that could mean a shorter school year in some districts and millions of dollars slashed from public universities, child-care programs and services for the disabled. Even then, California could face a $13-billion shortfall in the next fiscal year, the analyst said.
Brown's plan, developed in a series of closed-door meetings between his senior staff, labor leaders and representatives of Democratic legislative leaders, would add an extra 1% tax on individual income above $250,000 a year. Individuals making between $300,000 and $500,000 would be taxed an additional 1.5% for that income. And those making more than $500,000 would see an additional 2% hike.
Those hikes, coupled with the sales tax increase, could raise about $7 billion.
Brown, a Democrat, has argued that raising taxes is necessary to prevent further reductions but made a campaign promise not to do so without the approval of voters. After failing to win the necessary Republican votes to place a measure on the ballot as part of this year’s budget negotiations, the governor has vowed to do an end run by gathering voter signatures for his own initiative.
One political hazard is the sheer array of tax proposals that various groups are already trying to place on the ballot. Analysts and political professionals predict that if too many are presented to voters, they may simply reject all of them in frustration.
Papers have already been filed to close a loophole in the state’s corporate tax code and spend the $1.2 billion in proceeds on renewable energy projects, and to hike income taxes on most Californians to generate $10 billion for schools.
--Michael J. Mishak and Nicholas Riccardi in Sacramento
Photo: Brown's plan would tack an extra 1% tax on individual income above $250,000 a year. Credit: Rich Pedroncelli / AP Photo