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Showdown imminent over state taxes

To tax or not to tax is, once again, the key question to balancing California's chronically deficit-ridden budget — and possibly the political future of state lawmakers facing an election next year.

A linchpin of Gov. Jerry Brown's revised budget, which aims to close a $9.6 billion deficit, is legislative agreement — almost immediately — to extend three tax rates set to expire July 1.

A public vote on the tax extensions worth $8 billion a year would come later, either this fall or more likely in 2012, according to state Sen. Mark Leno, D-San Francisco, the Senate Budget Committee chairman whose district includes southern Sonoma County.

But Republican lawmakers, who hold four of the votes needed to extend the taxes, appear dug in against anything that resembles a tax increase.

"They haven't yet given an inch," Assemblyman Michael Allen, D-Santa Rosa, said.

Allen, an Assembly Budget Committee member, said it "makes sense" to keep the current taxes in place. "You have the budget resolved for the (fiscal) year," he said "People have some certainty."

In his news conference Monday, Brown warned of an "$8 billion hole" to be filled if the tax extensions are rejected.

If the current tax rates are allowed to expire, the statewide sales tax would drop by 1 percent, annual vehicle license fees would be cut nearly in half and state income tax bills would drop for those claiming dependents.

"We'll go to plan B, C and D," Brown said, declining to elaborate on the what would be done to implement an all-cuts budget favored by Republicans.

"I'm not going to give the Republicans a roadmap to ruin," Brown quipped, when reporters pressed for specifics.


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