State of The State: Tax Initiative Will Dominate Brown Agenda in 2012

SACRAMENTO, Calif. (AP) — Gov. Jerry Brown gave Californians a choice between higher taxes and deeper cuts to public schools and other core functions of government during his State of the State address Wednesday, essentially beginning his campaign for a planned November ballot initiative on taxes.

The Democratic governor said his push for temporary tax increases to the wealthy and the state sales tax are the best options to end California's cycle of budget deficits and cutbacks to teachers, social service programs and health care services for the poor. He noted that his budget for the coming fiscal year closes a $9.2 billion deficit with a roughly equal proportion of spending cuts and tax increases.

"Neither is popular but both must be done," he said.

Despite support from within his own party, Brown's path to November will not be easy.

At least two other groups are proposing their own tax initiatives for the ballot, creating a logjam of similar issues that could confuse voters and lead them to reject all the proposals. At the same time, Republican lawmakers and anti-tax advocates are prepared to counter the governor's proposal by saying state government is still unable to control its spending.

The Republican leaders of the Assembly and Senate issued a joint statement criticizing Brown's address even before it was delivered to a joint session of the Legislature.

"Unfortunately, the governor's vision is centered around one thing — higher taxes," said Assembly Minority Leader Connie Conway of Tulare. "Governor Brown says that the sky will fall if Californians don't agree to a $35 billion dollar tax increase. You and I know that this simply isn't so."

Brown said his tax hike would generate $7 billion a year through 2017, by raising income taxes on individuals who make $250,000 a year or more and boosting the state sales tax by half a cent. The Legislative Analyst's Office differs on the amount of revenue likely to come from the wealthy and says Brown's plan actually will generate far less — about $4.8 billion a year.

"As for the initiative, it is fair. It is temporary," Brown said. "It is half of what people were paying in 2010. And it will protect our schools and guarantee — in the constitution — funding for the public safety programs we transferred to local government."

Wednesday was the second State of the State address of Brown's third term in the governor's office, coming after a year in which he failed to persuade Republicans to along with another tax plan. Last year, he wanted the Legislature to extend a series of expiring tax hikes but could not muster the required two-thirds vote.