Calif. Dems announce plan to jump-start budget talks; Republicans oppose proposed tax hike

Democrats try to jump-start budget negotiations

SACRAMENTO, Calif. — Democratic lawmakers released a new tax plan Tuesday in an attempt to jump-start California’s stalled budget talks, but it met with immediate resistance from Republicans.

Assembly Speaker John Perez and Senate President Pro Tem Darrell Steinberg said their plan would close the state’s $19 billion deficit and protect jobs.

It would include some spending cuts and lower the state sales tax. It also would increase the vehicle license fee and personal income tax for nearly all brackets — both of which are deductible on federal tax returns. Democrats said this would result in a net savings for taxpayers.

Republican lawmakers oppose the plan, saying it hurts the middle class and rejects sensible spending reductions.

“Rather than reducing spending to close a $19.1 billion budget deficit, Democrats want to raise taxes on working and middle-class Californians to continue to fully fund government programs we can’t afford,” Assembly Minority Leader Martin Garrick said in a statement.

Perez, D-Los Angeles, said Democrats put forward a plan that reflects California’s urgent needs after lawmakers held more than 100 budget hearings.

“Californians value education, we value jobs, we value the safety net for the poor, the sick and the elderly,” he told a Capitol news conference. “We recognize that in these difficult times, painful sacrifices are required by everyone, especially those who have been asked to sacrifice the least.”

Democrats also proposed delaying the start of new business tax breaks that are scheduled to take effect this year. They said the move would prevent $2 billion in cuts to education and other public services.

Earlier this month, Schwarzenegger warned he might not sign a budget before he leaves office in January unless he gets budget, pension and tax reforms.

Schwarzenegger spokesman Aaron McLear on Tuesday called any proposed tax increase “dead on arrival.”

Steinberg spokeswoman Alicia Trost said Democrats would welcome any plan from the governor or Republican lawmakers that simultaneously cuts taxes, increases revenue, spurs job creation and brings in more federal money.