Governor aims to increase highest tax bracket and sales tax for a limited time

by Brian Leubitz

If nothing else, Gov. Brown is ambitious this go-round.  While his pension plan is slowly simmering in the Legislature, he knows that we really can’t continue to function with cuts-only budgets.  With the impending decision by Director of Finance Ana Matosantos on whether to pull the triggers in the last budget deal, we are looking at billions more of holes in the budget to fill. (And at this point, the only question that is out there is how much of the triggers will be pulled.)

Brown has mentioned that he will be bringing something to the ballot in terms of revenue, but it seems that there is serious movement on it now.  He’s been meeting with labor and his supporters too work on a plan that they can agree to get on the November ballot.

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.(LA Times)

The plan would buy four-five years of time in order to both reset the budget and hope that the economy recovers.  Over the past six months there have been a raft of proposals being discussed from various organizations, and the most sure way to losing on all of them is having more than one tax measure on the ballot.  If this does hit the streets fairly soon as anticipated, other potential measures will probably die quietly.

Until we see the details on this measure, I’ll reserve full judgment.  I do not like the inclusion of sales taxes, one of the most regressive taxes, but they do seem to be the most likely to pass.  Other than taxing the 1% that is.  Expect further details by next week at the latest.