Brown Says California Faces $25 Billion in Budget Cuts Without Tax Vote

California Governor Jerry Brown pledged to cut $25 billion from an $85 billion spending plan to close the state’s budget gap if lawmakers block a special election to allow voters to extend temporary tax increases.

If lawmakers don’t approve the special election, Brown said he’d hold up the budget for as long as it takes to eliminate the $25 billion deficit through spending cuts.

“It’s very fundamental, whether you vote the taxes or you vote the cuts,” said Brown, a 72-year-old Democrat who was governor from 1975 to 1983. He spoke today at a joint legislative budget conference committee hearing in Sacramento.

Brown has pledged to fix the financial strains that have left California with the biggest deficit of all U.S. states, and the lowest credit rating. With an economy bigger than Russia’s, California has coped with $100 billion of budget gaps in the past three years amid the global recession.

He has proposed an $84.6 billion general-fund budget that trims $12.5 billion with spending reductions and requires lawmakers to call a special election in June for voter permission to extend almost $10 billion of higher vehicle fees, sales taxes and income-tax rates to avoid even deeper cuts.

Brown’s plan deals with an $8.2 billion deficit that has emerged in the current budget, as well as a $17.2 billion hole, about 20 percent of spending, in the fiscal year that begins July 1.

To contact the reporters on this story: Michael Marois in Sacramento at mmarois@bloomberg.net; Alison Vekshin in San Francisco at avekshin@bloomberg.net

To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net

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