Gov. Arnold Schwarzenegger, butting heads with his own Republican Party, has proposed a temporary 1-cent sales tax increase that would generate billions to help end a bitter budget standoff.

Schwarzenegger made it clear in making the proposal to legislative leaders over the weekend that he also wants long-term fixes to the state's chronic budget woes, several legislative sources from both parties said Monday.

The governor basically framed his sales tax hike – expected to raise about $6 billion annually – as a temporary sacrifice to be recouped by Californians in years to come, the sources said.

Aaron McLear, Schwarzenegger's spokesman, declined to confirm or deny the report Monday in keeping with his practice not to discuss closed-door negotiations.

"The governor has been pushing for a compromise between legislative leaders, and budget reform must be part of any agreement," McLear said.

Specifically, Schwarzenegger's proposal would hike the sales tax rate by 1 cent for three or four years, then drop the rate even lower than consumers pay now – perhaps by a quarter cent – for enough years that Californians could recover their losses, legislative sources said.

California's current sales tax rate is 6.25 percent, but all counties charge at least an additional 1 percent, many even more than that.

For supporting a temporary sales tax hike, the governor wants long-term budget fixes that include immediate cuts and a "rainy day" fund that sets aside revenue in years when the economy is strong, the legislative sources said.

Schwarzenegger's temporary sales tax hike was not greeted warmly Monday by either Democrats or Republicans.

Passage of the state budget, and any tax increase, requires support by the governor and approval by two-thirds of each legislative house.

Assembly Speaker Karen Bass, D-Los Angeles, said early Monday that she does not foresee a budget agreement in the next week or so.

Steve Maviglio, Bass' spokesman, was noncommittal when asked later about the governor's proposal for a temporary sales tax hike.

"We've said all along that everything is on the table, and we're not going to balance the budget by cutting education and health care," Maviglio said. "That continues to be the case."

Senate President Pro Tem Don Perata, D-Oakland, declined comment Monday.

Rather than a large sales tax increase, which could hit low-income Californians hardest, Democrats have pushed for generating revenue by rolling back the dependent child income tax credit, increasing corporate taxes and creating two higher income tax brackets for the state's biggest earners.

California's budget standoff has now extended 36 days into the new fiscal year. Democrats want to raise taxes to bridge the state's $15.2 billion gap, while Republicans are pushing for budget cuts.

Senate GOP leader Dave Cogdill, R-Modesto, said in a written statement Monday that the governor's proposed 1-cent sales tax hike would "worsen an already languishing economy."

Cogdill said long-term budget fixes are necessary but "people should not have to pay dearly with more of their hard-earned dollars" to accomplish such change.

"I cannot envision any Republican legislator supporting such a proposal," Cogdill's statement said of the 1-cent increase.

Assemblyman Roger Niello, a Fair Oaks Republican who serves as a point man on budget issues, applauded the notion of a rainy-day fund but said it would not be reliable unless paired with a cap on state spending, which Democrats oppose.

Niello said he cannot support hiking sales taxes "right when the economy is in the tank" in return for a commitment that the tax rate would drop long after Schwarzenegger leaves office.

"How would we know it would actually happen?" he said.

Kris Vosburgh, executive director of the Howard Jarvis Taxpayers Association, called the governor's proposal a "tax on business activity."

"If this is the governor's solution to our budget crisis, we're in big trouble," he said. "We're seeing higher prices for food, gasoline, and it seems like not only the state but every local agency is reaching for our wallets."

Anthony Wright, executive director of Health Access California, a consumer advocacy group, applauded the governor's push to raise revenue rather than make "devastating cuts" to public services.

"But we'd be concerned about only a temporary fix to what are long-term needs," Wright said. "It's not like the health care needs of Californians are going to go away in three years."

Call Jim Sanders, Bee Capitol Bureau, (916) 326-5538. Kevin Yamamura of the Bee Capitol Bureau contributed to this report.