Senate President Pro Tem Darrell Steinberg said Wednesday he doesn't plan to pursue a general tax hike again this year, largely because he doesn't think Republicans will sign on.
Republican Gov. Arnold Schwarzenegger has said he will not support tax hikes. GOP legislators also remain unlikely to support them after members suffered political consequences for supporting $12 billion in temporary tax hikes.
The Sacramento Democrat, appearing at the Sacramento Press Club, acknowledged the political difficulty of increasing taxes on sales or income this year to help close the state's $19.9 billion budget deficit.
"I don't plan to put forward a general tax increase, because I don't think we'll pass it," Steinberg said. "I'm not interested in my hair on fire when it's not going to lead to an actual, productive result."
He said Democrats instead will look instead at reducing corporate tax benefits, including those won by Republicans in the last two years of budget negotiations. The Senate Budget Committee on Tuesday took steps in that direction by rolling back affiliate tax-credit sharing and deductions for past operating losses as part of a complex gas-tax swap proposal.
Republicans and business interests have long maintained that such changes are tax hikes and require a two-thirds vote of the Legislature. Democrats believe they can pass those measures now on a majority vote by tying them to a gas tax decrease, thereby ensuring that overall tax collections remain neutral.
Steinberg for weeks discussed requiring businesses and governments to withhold taxes for independent contractors, a proposal that could raise $1.4 billion in 2010-11, according to the Franchise Tax Board. But Senate Democrats did not include that idea in their stopgap budget solution because Schwarzenegger has indicated he would veto the requirement.
Schwarzenegger publicly has taken no position on the gas-swap plan and its rollback of two corporate tax benefits. "We need to look at this and see exactly what it is," Schwarzenegger spokesman Aaron McLear said.
PHOTO CREDIT: Senate President Pro Tem Darrell Steinberg, Nov. 13, 2009. Michael Allen Jones/Sacramento Bee
Latest posts:
About Comments
Reader comments on Sacbee.com are the opinions of the writer, not The Sacramento Bee. If you see an objectionable comment, click the "report abuse" button below it. We will delete comments containing inappropriate links, obscenities, hate speech, and personal attacks. Flagrant or repeat violators will be banned. See more about comments here.