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Brown Wants ‘Clean Election’ to Bridge California Spending Gap With Taxes

Jerry Brown, running California (STOCA1) again for the first time since 1983, spent part of his initial year back trying to coax Republican lawmakers to extend expiring taxes. Lesson learned, Brown now says he’ll go to voters instead.

Brown said he’ll spend much of 2012 campaigning for a ballot initiative to boost income taxes on those earning at least $250,000 and raise levies on sales to 7.75 percent from 7.25 percent, to erase the most-populous state’s $13 billion budget deficit. If Brown and his allies fail, he’d make deeper cuts to education and social services that he said would inflict lasting damage on California.

Chronic fiscal malfunctions have saddled California with a debt rating of A- from Standard & Poor’s, the lowest of any state. Brown, a 73-year-old Democrat, said he’s building his 2012-13 budget on the assumption that his tax increases pass, and hopes to persuade supporters of competing plans to consolidate their ideas into “a clean election, one major shot.”

“When I ran for office, I said the mess we got into took place over several years,” Brown said Dec. 27 at a press briefing in Sacramento. “This may take a term or two to complete the job.”

Brown said Sacramento became a more rigidly partisan place in the 28 years that he left the governor’s office to run for U.S. Senate, for president and to study in Japan and India.

California Governor Jerry Brown said he’ll spend much of 2012 campaigning for a ballot initiative to boost income taxes on those earning at least $250,000 and raise levies on sales to 7.75 percent from 7.25 percent, to erase the most-populous state’s $13 billion budget deficit. Photo: Justin Sullivan/Getty Images Close

California Governor Jerry Brown said he’ll spend much of 2012 campaigning for a ballot... Read More

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California Governor Jerry Brown said he’ll spend much of 2012 campaigning for a ballot initiative to boost income taxes on those earning at least $250,000 and raise levies on sales to 7.75 percent from 7.25 percent, to erase the most-populous state’s $13 billion budget deficit. Photo: Justin Sullivan/Getty Images

“The absolute unanimity of the parties, either in support of or in opposition to a position, is emblematic of where we are today,” Brown said of the partisanship that thwarted his plans in 2011. “Things are more centralized here in the capital as well as in Washington.”

Ballot Measure

Brown spent much of the spring trying to persuade Republicans in the Legislature to break ranks and join Democrats in supporting a ballot measure that would have extended higher sales, income and vehicle taxes. Although Brown’s fellow Democrats control both the Senate and the Assembly, they needed at least four Republican votes to reach the two-thirds majority required for tax increases.

Redrawn legislative districts may strengthen Democratic majorities, although reaching the two-thirds threshold is unlikely, political analysts such as Douglas M. Johnson of the Rose Institute of State and Local Government at Claremont McKenna College in Claremont, California, have said.

Given Up Hope

Brown said he’s given up hope of a legislative breakthrough in favor of a voter initiative in November that would restore sales taxes to their former level, the nation’s highest, and boost income-tax rates on individuals making $250,000 or more, or on couples earning $500,000 or better, by 1 percentage point, to 10.3 percent.

Brown said he’s building the state’s 2012-13 budget around the assumption that the tax increase passes. He’s courting his traditional allies in labor unions along with businesses to support the ballot measure, he said.

“I don’t think it will fail,” Brown said. “If it does, I would say that skepticism about public service is very deep.”

The governor, who’s due to unveil a new budget in the first half of this month, said he envisions further rollbacks in state services. The exception will be public schools, which have a “very good” fiscal outlook for the next couple of years, after dodging the possibility of a seven-day reduction in the academic year, Brown said.

Brown, who was California’s governor from 1975 to early 1983, declined to say whether he would seek a second term, which would end three months short of his 81st birthday.

“I’ve taken a long time to get here,” he said. “I’m not going to go away just because things aren’t going right.”

To contact the reporter on this story: James Nash in Sacramento at jnash24@bloomberg.net

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

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