Governor's Tax Plan Not a Surprise to Analysts

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(Sacramento, CA)
Tuesday, August 5, 2008

The Governor has long pledged not to raise taxes.  Now he’s proposed a short-term one cent hike to help offset a 15 billion dollar shortfall.  Jack Pitney – a Professor of government at Claremont McKenna College says it’s no shock that Schwarzenegger now seems to be changing his tune.  He says it’s too big a hole to fill without some new revenue.  Pitney says the Governor’s truly between a rock and a hard place:

This is going to make him unpopular, but a budget stalemate would make him more unpopular and enormous reductions in state services would make him even more unpopular than that. So he has a choice between unpopular, very unpopular and extremely unpopular.”

Pitney says the real question is whether the Governor can get his fellow Republicans’ support for the tax hike.  They’re strongly against new taxes and their votes are needed to pass a spending plan.  He suspects that if the Governor can push through some long-term budget reforms, GOP lawmakers might - reluctantly - jump on board.  Democrats say they’re open to talking about the sales tax, but their own plan increases income taxes on the rich instead.  The budget is now more than a month late.