SACRAMENTO -- The only way to avoid further debilitating cuts to schools and other popular services is to raise taxes, Gov. Jerry Brown wrote Monday in an open letter to voters.
Brown, who filed a ballot initiative with the attorney general's office late Monday, will ask voters next November to approve temporary tax hikes on the wealthy, along with a small sales tax increase, to generate nearly $7 billion in new revenues each year for the next five years.
"The stark truth is that without new tax revenues, we will have no other choice but to make deeper and more damaging cuts to schools, universities, public safety and our courts," wrote Brown, who has already cut the state budget by billions of dollars.
Facing an intractable Republican party, which blocked his attempt at getting a vote in the Legislature to merely place a tax increase measure on the ballot, Brown opted for the more expensive -- and politically charged -- route of gathering signatures to place the tax initiative before the voters.
Under his plan, income tax rates would grow by 1 percentage point for individuals making $250,000, 11/2 percentage points for those making more than $300,000 and 2 percentage points for individuals making $500,000 a year or more.
The state sales tax would be raised by a half cent -- which Brown reminded voters is less than they were paying six months ago. The tax hikes for the wealthy would be retroactive to the beginning of this year and would last for another four years.
The revenues would be dedicated to schools and public safety, Brown said.
"This initiative will not solve all of our fiscal problems," Brown wrote. "But it will stop further cuts to education and public safety. I ask you to join with me to get our state back on track."
The initiative also locks in a constitutional guarantee of funding, through current sales tax revenues, to cities and counties to cover the shift of public safety services -- such as local police and child protective services -- from the state to local governments.
Republicans immediately blasted the plan. Assembly Republican Leader Connie Conway, R-Visalia, said Brown was relying on a "failed budget playbook," and called it a $35 billion tax increase on "hardworking Californians and job providers."
Senate Republican Leader Bob Dutton, R-Rancho Cucamonga, said Californians have consistently voted down tax-only proposals.
"Senate Republicans continue a call to action on reforms first," Dutton said. "Only with reforms can we put Californians back to work and restore the people's confidence in state government."
Senate President Pro Tem Darrell Steinberg, D-Sacramento, said it's time to "stop the bleeding" and begin reinvesting in schools and public safety.
"Californians realize that four years of draconian cuts have swung the pendulum too far," Steinberg said. "We've done enough damage, and enough is enough."
Brown will face strong headwinds as he attempts to win approval of new taxes: an array of other tax initiatives, a distracting presidential election, and voter angst amid continuing economic malaise.
Groups that have filed tax initiatives include one led by wealthy civil rights attorney Molly Munger, which would raise $10 billion with an income tax hike on nearly everyone, though the wealthiest would be hit with the biggest burden; another by the Think Long Committee, which is a broad tax reform plan that raises $10 billion, largely through expanding the sales taxes to services such as dry cleaning and car repairs.
On Monday, a coalition of liberal groups, including the Courage Campaign and the California Federation of Teachers, filed their own tax initiative that would bring in $6 billion by raising taxes on millionaires.
If voters are forced to choose between five major tax initiatives on the ballot, it could mean they all get rejected, said Dan Schnur, director of the Jesse M. Unruh Institute of Politics at USC.
"Long before Brown can convince voters to support his taxes, he's got to figure out a way to talk down his well-meaning allies and get them to pull their measures off the ballot," Schnur said.
Brown is still the most popular politician in Sacramento, but his support could erode if he continues to cut billions of dollars, particularly from schools. A Field poll showed that Brown has a 47 percent approval rate, more than twice as large as the support for the Legislature. But, nearly two-thirds thought it was a bad idea to include a provision in this year's budget to trigger automatic cuts if tax revenues fell short of projections.
If he has to go through on those automatic cuts -- with $1.5 billion of $2 billion to fall on schools -- voters may start to turn their ire on him, analysts said.
for the wealthy
Individuals would see their tax rate increase from 9.3 percent to: