MINDY SCHAUER / Orange County Register

Gov. Jerry Brown talks to reporters Thursday in Irvine after defending his tax plan before the Orange County Business Council.

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Gov. Brown says California business interests support his tax plan

Published: Friday, Jan. 20, 2012 - 12:00 am | Page 1A
Last Modified: Tuesday, Feb. 26, 2013 - 8:16 pm

SAN DIEGO – Gov. Jerry Brown, campaigning for higher taxes and infrastructure spending in the state's more conservative reaches Thursday, claimed widespread business support for his tax plan and suggested dire consequences should it fail.

"The stakes are very high," Brown told reporters after meeting privately with members of the Orange County Business Council. "We're talking about kids, schools, colleges and universities."

Appearing in Irvine and San Diego a day after his State of the State address, Brown used the attention of Southern California's large media markets to amplify his call for taxes and for transportation and water spending.

The Democratic governor said Kaiser Permanente and Occidental Petroleum Corp. are among the businesses that have donated or will donate to his tax campaign. Brown already has raised more than $1.2 million for the effort.

His November ballot measure to raise the state sales tax and income taxes on California's highest earners was cleared for circulation this week.

"We're on our way to having a substantial sum in the bank before the month is out," Brown said. "Business is not only supporting it, but they're putting their money where their mouth is."

The effect of businesses' support is uncertain. Brown has enjoyed a favorable relationship with business groups since taking office last year, but their support of his tax measure a year ago did not help him win over Republicans in the Legislature.

This year, despite expecting many businesses to support him, even Brown has said the tax plan might not be endorsed by the California Chamber of Commerce. Many conservatives who oppose the proposal believe higher taxes would burden businesses in a slumping economy.

Asked about the impact of higher taxes on business, Brown said he thinks "this $6 billion tax for five years in the context of a $2 trillion economy will help our schools and in no way retard our business investment."

On the second day of a two-day swing through Southern California, Brown stumped in more conservative territory than the previous day, when he addressed a joint session of the Democratic-controlled Legislature in Sacramento and an invitation-only crowd in Los Angeles. Both San Diego and Orange counties went for Brown's Republican opponent, Meg Whitman, in the 2010 election – in Orange County, by almost 20 percentage points.

But the business group in Irvine appeared sympathetic, its president appearing with Brown before reporters to make the point that taxpayers would pay less under his proposal than they did under recently expired tax rates.

"It's less money than what we just left in 2010," said Lucetta Dunn, president of the Orange County Business Council. "That becomes a compelling argument that I think our business community needs to focus on, and I think as a result, the general population will see that."

Legislative Republicans have said Brown's framing of his tax initiative as essential for education is disingenuous – suggesting the money will be spent on other programs – and at least one person took exception in a question-and-answer session following a speech by Brown in San Diego.

"It appears you are holding education hostage," a question card read to Brown said. "Please explain."

Brown, speaking at The City Club of San Diego, said that "education is the largest part of the budget. … When you need money, education cannot be ignored."

He said his predecessor, Gov. Arnold Schwarzenegger, was unable to sufficiently reduce spending and that, "Now I'm left with cleaning up a mess, and that mess requires some revenue, and it also requires some cuts."

Brown also proposed major education policy changes in his State of the State address.

On Thursday, he described as a "heavy lift" his proposal to change a funding system that requires schools to spend money for a variety of designated purposes, and he predicted a tussle in the Legislature. He said wealthy areas of the state are likely to object to a plan that he said would shift money to lower-income schools.

"That's a big, major reform with real bite in it," Brown said.

Over and over, the governor reiterated his support for California's controversial high-speed rail project. The persistence with which the administration has pushed that effort in recent weeks was nowhere more evident than when Brown spokesman Evan Westrup called the Irvine news conference to a close.

"Because of traffic – and we don't have high-speed rail – we've got to get to San Diego," he said.

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