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Brown Seeks 5-Year Extension Of California Taxes

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(credit: Justin Sullivan/Getty Images)

(credit: Justin Sullivan/Getty Images)

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LOS ANGELES (AP) — Gov. Jerry Brown proposed a budget Monday that would slash funding to most areas of state government and maintain a series of tax increases for five years to close California’s huge budget deficit.

KNX 1070’s John Baird Reports

The Democratic governor released his first budget proposal since winning election last fall. He called for $12.5 billion in spending cuts, including reductions in welfare, social services, health care for the poor and a combined $1 billion cut to the University of California and California State University systems.

Brown also wants the Legislature to call a special election in June to give voters an opportunity to continue hikes in the income, sales and vehicle taxes for five years. His proposal relies on new revenues of $12 billion.

The governor’s office said the only area of state spending he would protect is K-12 education.

Brown said his recommendations would close an 18-month budget gap estimated at $25.4 billion and require sacrifice from all Californians.

“For 10 years, we’ve had budget gimmicks and tricks that pushed us deep into debt. We must now return California to fiscal responsibility and get our state on the road to economic recovery and job growth,” he said in a statement.

Brown also has said he will seek to fundamentally restructure state government, shifting a host of responsibilities from the state to counties and cities, a process he has acknowledged will be complicated and controversial.

That includes eliminating redevelopment agencies and ending tax breaks available to businesses that operate in depressed areas designated as enterprise zones.

Brown said Monday that if voters approve, revenue generated from the sales tax and vehicle license fees currently set to expire in July would go to local governments to help pay for the changes.

The governor’s proposal to extend taxes will require support from Republicans in the state Legislature who have vowed to oppose all taxes. It’s a politically risky move after Californians rejected an extension of the taxes just two years ago as part of a package of ballot measures.

Brown campaigned on a promise not to raise taxes without voter approval.

“Without decisive action, the state’s severe budget problems will persist, threatening economic recovery, job growth, public education and the quality of life in California,” Brown said in a statement. “The adoption of this budget will position the state to lead the country as it slowly recovers from the Great Recession.”

Brown’s proposal also assumes the state Legislature would pass a spending plan by March — a date unheard of in recent legislative budget debates that have dragged on into the fall.

Voters last November lowered the threshold for budget passage to a simple majority.

The governor also is seeking an 8 to 10 percent cut in pay for state workers who aren’t covered by union-negotiated contracts, which he said would save the state about $308 million.

That actually could be an improvement for some state employees who currently are furloughed three days a month, said Patrick Whalen, general counsel for California Attorneys, Administrative Law Judges and Hearing Officers in State Employment, one of six unions operating without a contract.

Brown also wants a $1 billion rainy day fund.

Brown is proposing an $84.6 billion general fund budget, slightly less than the $86.5 billion adopted under former Gov. Arnold Schwarzenegger’s last budget.

The state’s general fund revenue comes largely from sales, income and corporate taxes.

(© Copyright 2011 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)

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