Breaking its long practice of opposing tax increases, the California Taxpayers' Association on Friday agreed to support Gov. Arnold Schwarzenegger's state budget proposal, including a sales tax boost.
The 82-year-old association is a non-profit representing all taxpayers, but some of California's largest corporations dominate its sizeable board of directors, which voted 28-19 to back the proposal Friday.
Schwarzenegger's latest spending proposal would close the state's $15.2 billion budget gap, in part, by imposing a three-year, one-cent-on-the-dollar sales tax increase on most taxable products, except gasoline and diesel fuel.
The boost would raise $4 billion this year and $9.9 billion more over the next two years, but be replaced by a 1.25-cent decrease on Sept. 1, 2011.
That decrease, along with long-term budget changes Schwarzenegger is proposing, played into the group's decision.
"As an association representing taxpayers, we have not arrived at our position lightly," said CTA President Teresa Casazza, in a statement. "Given the current circumstances, however, we can support a temporary sales tax increase as long as it is accompanied by meaningful budget reform, an economic stimulus plan and a future reduction in the sales tax rate that will make the change a net tax reduction over time."
The state is 67 days into the fiscal year without a budget, the longest the state has ever gone.
Call Bee Capitol Bureau Chief Dan Smith, (916) 321-5249.
