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Brown sells taxes to voters suspicious of spending

By Judy Lin

Associated Press

Published: Saturday, Jan. 28 2012 11:26 a.m. MST

FILE - In this Jan. 5, 2012 file photo, Gov. Jerry Brown discusses the cuts he has already made to help reduce the state's budget deficit as he unveiled his proposed $92.5 billion 2012-13 state budget at a Capitol news conference in Sacramento, Calif. While most other governors are proposing tax cuts and letting temporary tax increase expire, Brown is trying make the case for boosting taxes on the wealthy and the state sales tax.

Rich Pedroncelli,file, Associated Press

SACRAMENTO, Calif. — After failing to sell Republican lawmakers on tax increases last year, Gov. Jerry Brown faces another tough act of salesmanship in 2012, this time with voters.

While most other governors are proposing tax cuts and letting temporary tax increases expire, Brown is trying to make the case for boosting taxes on the wealthy and on everyone else through a hike in the state sales tax. He is doing so at a time when California is trying to work its way out of a deep recession and the jobless rate is the nation's second highest.

While a recent public opinion poll shows some support for his tax proposal, the Democratic governor faces challenges on numerous fronts.

Republicans and anti-tax groups insist that any tax increase will produce uncertainty for individuals and businesses, imperiling California's gradual recovery and adding to its reputation as over-taxed.

The governor's fellow Democrats, who control the Legislature, already have signaled that they do not want another round of spending cuts and have been reluctant to embrace the types of regulatory and spending reforms Brown says are needed to close the deal with voters in the fall.

At the same time, a recent statewide survey shows voters remain deeply suspicious of state spending and believe the government should be doing more with less. While they support raising taxes on the wealthy, they overwhelming dislike Brown's companion proposal to raise the sales tax by half a cent.

Brown is taking on the challenge at a time when many residents remain pessimistic about the direction of the economy.

While California's jobless rate dipped in December to 11.1 percent, its lowest rate since 2009, more than 2 million working-age Californians remain without jobs and the state's unemployment rate remains well above the national average of 8.5 percent. Californians' per capita income also has dropped during the recession, from to $43,211 in 2007 to $42,578 in 2010, the latest figures available.

Brown said he anticipates a difficult campaign, in part because of a seemingly unresolvable dilemma: Californians say they oppose spending cuts in education or social services but also don't want to tax themselves any more to pay for the costs of those programs. His challenge, he said, will be to clarify the choices for voters.

"I take nothing for granted," he said in an interview this week with KPPC radio.

The economic headwinds and voter sentiment toward government spending complicate Brown's quest for a tax increase, which is difficult to pass even in better times. Since 2004, California voters have passed just one statewide tax or fee increase — a tax on millionaires to support mental health treatment — while rejecting six others.

In a 2009 special election, the last time such a tax question was put before voters, they rejected Proposition 1A by a 2-to-1 margin. The legislative ballot measure would have extended temporary increases in the sales, income and vehicle taxes that lawmakers had passed earlier that year.

Brown's supporters are gathering petition signatures to place his plan on the November ballot. It would generate between $4.8 billion and $7 billion annually by boosting income taxes on individuals making $250,000 or more for five years and increasing the sales tax for four years.

If voters reject the tax hikes, Brown's budget proposal for the fiscal year that begins in July calls for an automatic cut of $5.4 billion to K-12 schools, a move that could shorten the school year by three weeks. Public opinion polls consistently show that California voters are willing to pay higher taxes if they know the money will be dedicated to public education.

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