Democrats' Budget Plan: Raise Taxes Without GOP Votes

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(Sacramento, CA)
Wednesday, December 17, 2008

  • GOP lawmakers have refused to raise taxes to balance the budget – They say it would cripple the economy.  So now Democrats are going around them.  Their newest plan is an 18 billion dollar measure.  It hikes the gas tax by 13 cents a gallon, increases the sales tax by three-quarters of a cent and includes a two-and-a-half percent surcharge on state income taxes.  It also includes Governor Schwarzenegger’s proposal for a tax on oil produced in the state.  And as Senate Leader Darrel Steinberg points out – it doesn’t even solve the whole problem: 

  • “If we could do 41 billion dollars here today, we would do it, but 18 billion is 44% and it’s a heck of a start.”

  • Democrats say they can pass the plan without Republican support.  By law it takes a two-thirds vote to pass new taxes.  But in this case, Democrats plan to cut some taxes – then pass a separate, higher fee instead.  Fees only require a simple majority vote.  Republicans say the plan is bad news for the state’s economy and a legal challenge is likely.  

  • Democrats say at Governor Schwarzenegger’s request, they’re adding economic stimulus measures aimed at creating jobs.  However it’s not yet clear whether the Governor will sign the measure if it passes.