State Republicans say no

Newport-Mesa’s local state lawmakers said they will not support Gov. Arnold Schwarzenegger’s proposal to raise the state sales tax by 1.5%, despite his proposed cut in government spending of $4.5 billion.

Schwarzenegger called the legislature back up to Sacramento on Thursday to announce the plan and begin an emergency session to try to resolve a recently projected $11.2-billion budget shortfall before Nov. 30, when this legislative cycle ends. He called the plan a compromise in a news conference, noting that it asks for almost equal amounts of cuts and new taxes.

When the Assembly and Senate passed a late budget six weeks ago, it projected an increase in revenue from last year. But California depends heavily on taxes from profits earned in the stock market, and the market’s recent crash crippled the revenue estimates counted on in the initial budget, said state Deputy Director of the Department of Finance H.D. Palmer.

Schwarzenegger is proposing to make up for the lost revenue by cutting $4.5 billion in spending — most of it coming out of the education budget — and raising the state sales tax by 1.5%, which would leave consumers in Newport Beach and Costa Mesa paying 9.25%.

State Sen. Tom Harman and Assemblymen Chuck DeVore and Van Tran all said Thursday that they would oppose the proposal as long as it contained a tax increase. Spending is already way too bloated, and a tax increase is unnecessary, they said.

“If the governor couldn’t get us interested in a 14% increase in the sales tax this summer, I’d like to know how he plans to get us interested in a 21% tax increase now,” DeVore said.

DeVore and Tran think they have a united Republican caucus in the Assembly, much like they did in the last round of budget negotiations, and therefore will not have to give ground on the tax issue. Democrats have a 50-30 majority in the Assembly, but need at least four Republican votes for a two-thirds majority on measures that would raise taxes. A united Republican front refusing to pass any budget with a tax increase eventually succeeded in taking taxes out of all proposals in September.

The passed budget relied heavily on inflated revenue projections, though, and won’t be solvent in its present state, according to the governor’s office.

Meanwhile, the Democratic leadership said it is unwilling to make up all of the lost revenue through additional cuts to education or social programs.