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Jerry Brown Needs Common Ground For Tax Extensions

Raquel Estupinan |
March 4, 2011 | 5:51 p.m. PST

Staff Reporter

Jerry Brown, Courtesy Creative Commons
Jerry Brown, Courtesy Creative Commons

With six days left until California lawmakers must approve a budget that addresses a nearly $27 billion deficit, political experts say Gov. Jerry Brown will have to find common ground with his Republican constituents.

“He has to walk a very fine line,” said Bill Whalen, a political analyst at Stanford University’s Hoover Institution.

The governor’s deficit reduction plan, as amended so far by legislators, includes $12.5 in spending cuts, $3 billion in program changes and $12 billion tax extensions. There would also be a $840 million reserve fund. Some political experts predict Brown will likely struggle to gather Republican support for tax extensions when the budget bill is considered by the full Assembly and Senate next week.

Taxes that are set to expire in 2013 would be extended until 2016, which is a problem for some Republican legislators. Brown has said that without the extended taxes, California schools, welfare, health and other programs would likely suffer deep cuts.

“It’s not the cuts so much; it’s the taxes that they (Republicans) don’t like,” said Tony Quinn, an expert on California government. He added that five years of the same taxes is longer than necessary to most people.

In February, Brown told legislators that if they do not approve the tax extensions, he would be forced to sign a budget that makes about $26 billion in cuts. His biggest selling point: under an all-cuts budget, public schools may have to shorten the school year by a month.

Quinn said that Brown is trying to resurrect what voters have already turned down. About three in five California voters said no to extending the same taxes back in May 2009. Brown needs two Republican votes from each house to ask voters about the extensions again this June. The simple majority approval needed for a budget and most other legislation does not apply for tax extensions.

Brown has been in talks with Senate Republicans, but he has yet to receive the support he needs. To get that Republican backing, it “would take major concessions on his (Brown) part,” Quinn said.

But Brown has indicated that he is willing to negotiate on his budget, Whalen said.

Three areas where Brown should negotiate with both parties, Whalen said, are in pension reform, regulatory reform, and in tax breaks to encourage growth in businesses. He said Brown needs leaders from each house at the same table to work on a comprehensive solution.

“It’s very simple,” Whalen said. “Republicans have to make him an offer he won’t refuse.”

In the days leading up to Brown’s March 10 deadline to approve a budget, those Republicans generally opposing the tax extensions will see how far they can make the governor bend on his plans, Whalen said.

On Thursday, the head of the California Chamber of Commerce, Allan Zaremberg, said that taxes could be part of a comprehensive solution for the state’s budget shortfall and the tax extensions would not target particular high-wage earning businesses.

But agreeing on a comprehensive balance of taxes and cuts is not that simple.

“It’s much more complex this time,” said Allan Hoffenblum, owner of a Los Angeles based political consulting group.

Hoffenblum said a large group of Republicans are adamantly opposed to extending taxes. Many Republican members of the Legislature were re-elected in safe Republican districts; however, in November, Californians removed redistricting authority from lawmakers.

“I’ll be surprised if Brown doesn’t get the two votes from each house he needs,” Hoffenblum said, quickly adding that he does not have specific insight into how lawmakers will vote.

In Los Angeles, the Chamber of Commerce endorsed the tax extensions last week. Hoffenblum said the endorsement does not have much clout because the chamber is mostly Democrat, and Brown needs more Republican support.

Reach reporter Raquel Estupinan here.



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