Committee Approves New Tax Hikes

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(Sacramento, CA)
Tuesday, June 16, 2009

The budget conference committee approved the taxes on a party-line vote.  They include a nearly ten percent tax on oil extracted in the state and a 1.50 per pack tax increase on cigarettes.  In addition, the committee voted to repeal several corporate tax breaks.  Democratic Assemblywoman Noreen Evans chairs the committee:

"This is very carefully targeted, very carefully crafted, you, sitting out there in the audience, unless you’re an oil company, unless you’re a smoker, you’re not going to pay any more in taxes. But the state will have more revenues.”

But Republicans and Governor Schwarzenegger oppose new taxes.  GOP Assemblyman Jim Nielson:

“This is probably the most massive and quickest tax increase ever imposed in the state of CA.  It’s almost breathtaking to me, and it certainly deserves a resounding no vote and I expect the public are going to be rather concerned about what’s happening here right now.

The committee adopted a budget with fewer cuts than Governor Schwarzenegger had proposed.  They rejected his proposal to borrow billions from local government, as well as his plans to eliminate some welfare programs and cut state worker pay another five percent.  A floor vote is expected next week, but is likely to fail, given the GOP opposition to tax increases.  Any deal is likely to be worked behind closed doors between legislative leaders and the Governor.