 |
 -0 |
 |
|
||||||||
 |
||||||||
 |
||||||||
|
||||||||
|
||||||||
 |
|
Davis to seek billions in loans Senate Republicans also cast doubt Tuesday on the effectiveness of a half-cent sales tax increase, citing statistics from the Board of Equalization that show an increase would discourage spending and reduce the amount of taxable sales in California by $1.8 billion. Democrats are equally adamant that taxes need to be raised -- at least to pay off any loans. Some also are concerned that the plan could ultimately push the deficit into the 2004-05 fiscal year -- and it would be impossible to raise taxes in an election year. Some of the most liberal Democrats object to any sales tax increase because it is viewed as affecting the poor disproportionately. Still, it seems that both sides are moving toward a deal. Democrats suggest that Republicans might not have to vote for new taxes. Instead, voters could be asked to approve bonds to pay off the levies. Bill Leonard, a member of the Board of Equalization and a former GOP lawmaker, said the good spin is: ``The difference between the governor and the Republicans is a half-cent sales tax. I would think that would be bargainable.'' Kim Reuben, a research fellow with the Public Policy Institute of California, views the anticipated moves as ``inevitable'' because to balance the budget ``we need to raise some taxes and need to have some debt carried over.'' The tactic also could help get the budget passed sooner. With the new fiscal year starting July 1, Davis is striving to get his spending blueprint approved and signed by July 4. Wall Street wants a plan in place soon -- and with a guaranteed revenue stream to pay off the $8 billion to $10 billion loan. The governor, whose popularity has plunged to an all-time low especially because of the state's grim fiscal picture, can't afford a protracted budget standoff such as last year's historic two-month impasse that could further fuel a recall effort against him. On Tuesday, Davis refused to comment on his new plan, telling reporters: ``We'll talk about it in detail tomorrow.'' Steve Maviglio, his press secretary, said the revised budget would reflect ``the governor's values'' and ``largely what the Legislature has asked him to do.'' He indicated the deficit over the next 14 months will be as high, if not higher than projected in January. ``I think you'll hear, if not these words, but the message `I told you so.' '' The state's budget woes can be traced to 2000 and the height of the good economic times when income tax revenues from capital gains and stock options quadrupled to $17.6 billion. But those revenues plunged to around $5.7 billion when the economy collapsed.
--------------------------------------------------------------------------------
Mercury News staff writers Jessica Portner and Laura Kurtzman contributed to this report. Contact Mark Gladstone at mgladstone@mercurymews.com or (916) 325-4314.
|
|
|
