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Gov. Brown asks Calif to dream big, approve taxes

By Juliet Williams

Associated Press

Published: Wednesday, Jan. 18 2012 5:05 p.m. MST

"In this environment, the best way to compete is to show a different direction," Christie said. "Let others choose tax increases. We choose responsible tax cuts to give our overburdened citizens real relief."

Brown has said his tax hike would generate $7 billion a year through 2017, but the state legislative analyst's office differs on the amount of revenue likely to come from the wealthy and predicts Brown's plan would generate only about $4.8 billion a year.

The governor also faces competition from other Democratically aligned allies: At least two other groups are proposing their own tax initiatives for the ballot which could confuse voters and lead them to reject all the proposals.

Brown said Wednesday that he is prepared to make even more spending cuts in the year ahead because "the situation demands them," but also said imposing higher taxes, especially on the wealthy, was needed for a balanced approach.

And he made clear that he supports big infrastructure investments, such as a proposed $98 billion high-speed rail line linking northern and southern California that has come under harsh criticism from many fronts as the price tag more than doubled.

"Those who believe that California is in decline will naturally shrink back from such a strenuous undertaking," he said. "I understand that feeling but I don't share it, because I know this state and the spirit of the people who choose to live here."

He said he will have the elements of an "enormous" water project to ensure water for 25 million Californians and millions of acres of farmland by this summer.

Senate President Pro Tem Darrell Steinberg, D-Sacramento, said the governor combined a positive vision for California with a concrete path to getting there. He noted that deep cuts to social programs have left many Californians hurting.

"Today was about how we get beyond having to make those kinds of choices and to build something better in California," said Steinberg, who supports Brown's tax plan.

Brown, who first served in the governor's office from 1975 to 1983, also gave a full endorsement of the state's future prospects. His father, who was governor from the late 1950s to the mid-1960s, is credited with overseeing the construction of the state's extensive water system and the expansion of its higher education system.

Brown said California's elected officials should have similar ambitions today, even amid the worst economy since the Great Depression. In addition to the maligned high-speed rail project and water, he promised to protect the environment, promote alternative energy and engage in a robust debate about how best to fix California's faltering schools.

Wednesday was the second State of the State address of Brown's third term in the governor's office, coming after a year in which he failed to persuade Republicans to go along with another tax plan.

His pitch largely paralleled the priorities he outlined earlier this month in releasing his budget for the 2012-13 fiscal year, a spending plan that calls for continued cuts to welfare and social service programs such as in-home support. Brown has warned that if Californians reject his tax plan in November, he will call for $5.4 billion in immediate spending cuts that will hit public schools the hardest.

Those cuts could reduce the school year by three weeks, after it already dropped from 180 days to 175.

The governor has argued that the temporary tax increases are necessary to stabilize California's finances as it emerges from a recession that has seen the unemployment rate soar and government tax revenue plunge. State tax revenue has dropped by $17 billion since the recession began in late 2007.

Brown also seeks to improve government efficiency, pay down debt and scale back public employee pensions.

The Howard Jarvis Taxpayers Association, the California Taxpayers Association and Small Business Action Committee are teaming up on their own ballot initiative seeking to impose a tougher state spending cap using a formula driven generally by population and inflation growth.

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