Aug 5, 2008 7:23 pm US/Pacific
GOP Lawmakers Reject Schwarzengger Sales Tax Plan
SACRAMENTO (CBS 5 / AP) ―
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California governor Arnold Schwarzenegger.
Justin Sullivan/Getty Images
Gov. Arnold Schwarzenegger floated the idea of a temporary sales tax increase to help close the $15.2 billion state budget deficit during recent talks with legislative leaders, but Republican lawmakers rejected the idea Tuesday.
Senate Minority Leader Dave Cogdill said he thinks such a tax increase would "worsen an already languishing economy" and reduce state revenues even further.
"Housing values are plummeting, jobs are at risk, and everything costs more for the average Californian," said Cogdill, R-Modesto. "I cannot envision any Republican legislator supporting such a proposal."
Cogdill said the temporary nature of the tax increase was being proposed as a way to give cover to Republicans who might eventually vote for a budget compromise.
The Senate Republican leader said he believed the state budget could be balanced without tax increases and indicated that cutting spending is the key.
Schwarzenegger spokesman Aaron McLear declined to discuss the sales tax proposal, saying budget negotiations were confidential. He said the governor remained optimistic that legislative leaders could reach a fair compromise.
Sources familiar with the budget talks who did not want to speak publicly for fear of upsetting negotiations said Schwarzenegger's proposal would raise California's sales tax by 1 percent for several years, then decrease it to an amount lower than it is now.
The state collects 7.25 percent in sales tax, with 1 percent of that automatically sent back to local governments. Many local entities also tack on their own increases, bringing the sales tax to more than 8 percent in many parts of the state.
The Democratic leaders of the Assembly and Senate said the sales tax proposal wasn't theirs, but they did not reject the idea.
Steve Maviglio, a spokesman for Assembly Speaker Karen Bass, said Democrats have always said they'd consider any proposal but added that the sales tax "was not a part of our budget plan."
"It's not our idea, so it's up to the governor," to push Republicans to support increasing the sales tax, Maviglio said.
Senate president Pro Tem Don Perata said the sales tax idea was "a start" to trying to reach a budget agreement, but he said negotiations for now have reached "an impasse."
But he noted that Schwarzenegger "doesn't have any support in his own party" for his sales-tax proposal.
Perata said his fellow Democrats would prefer to increase taxes on high-income Californians as opposed to raising the sales tax paid by all.
(© 2009 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)
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