Gov. Jerry Brown not giving up on tax hikes to help California budget

Reporting from Sacramento —  Gov. Jerry Brown, facing mounting pressure to walk away from his stalled budget plan, is refusing to yield and will seek to reinvigorate his campaign for a public vote on taxes with the revised spending package he releases Monday.

But there will be a new twist.

Having failed to win enough Republican votes to put the taxes on the ballot in June, the governor is expected to ask lawmakers to impose at least some of the levies first and seek Californians’ blessing after the fact, said officials with knowledge of Brown’s plan.

The governor faces rough seas in his quest for billions of dollars in additional income, sales and vehicle taxes.

GOP lawmakers’ resolve to block both a legislative vote for the taxes and a public referendum has intensified with recent news that state revenue is outpacing projections. The uptick could continue, they say, erasing billions from a $15-billion deficit.

Even Democratic leaders and the governor’s union backers, doubting the odds of a tax measure passing at the ballot box, are pushing Brown to break his pledge and forgo voter input.

“Go get a deal done,” said David Kieffer, executive director of the state council of the influential Service Employees International Union, in a challenge to Brown and the Legislature. Californians “would vote the taxes down,” he said, and “they don’t actually need to be involved in this decision.”

Kieffer’s union launched a television ad campaign last week urging that the budget be balanced without “extreme” cuts.

Brown’s staff declined to comment on the governor’s latest budget plan. But some officials have said he will embrace the revenue upswing and drop his pursuit of a higher income tax rate for 2011 — though he wants it included for 2012.

He also is abandoning a proposal to wipe out tax credits for businesses that hire people in down-at-the-heels neighborhoods, the officials said, speaking anonymously because Brown’s plan is not yet public.

The stakes are high, despite the revenue windfall and more than $11 billion in service cuts and other reductions already made by the Legislature. On Friday, officials announced plans to close as many as 70 state parks to help shrink the deficit.

“We are experiencing turbulent times that necessitate deep — almost unthinkable — cuts to public service,” Brown said in a statement.

The Democrats who dominate the Legislature have said that without Brown’s proposed taxes, they would have to decimate public safety and schools spending. Moreover, if Brown fails to broker an accord and budget talks drag into the fall as they did last year, the state could be forced to issue IOUs instead of paying bills and could again descend into fiscal chaos.

There are no signs yet of a compromise. Talks have been dormant for weeks. The fiscal year begins July 1.

The Democrats “want us to just roll over and give them more money to waste, and I just don’t see members of my caucus” doing that, said Senate Republican leader Bob Dutton of Rancho Cucamonga.

Brown has been largely cloistered from public view for two weeks after surgery to remove a curable skin-cancer growth on his nose, and the lull has robbed him of momentum heading into the heart of budget season in Sacramento. During that time, interest groups have been competing intensely to capture some of the unanticipated revenue.

The atmosphere in the Capitol is akin to a “feeding frenzy,” said Assemblyman Paul Cook (R-Yucaipa), with lobbyists vying, shark-like, for “the biggest hunk of meat.”

Brown’s modified budget plan Monday will include a new revenue forecast. Tax receipts through April have been $2.5 billion ahead of expectations.

“If the news is as good as it looks, I think it’s going to hurt the governor’s chance to get any support for the tax increase,” said Cook, who has been widely seen as a possible vote in favor of Brown’s fiscal plan.

Indeed, Republicans in the Assembly unveiled a no-tax budget package last week — the first substantive GOP plan this year. It was balanced with deep cuts for state workers and in services for the needy while averting cutbacks for public schools, universities and law enforcement.

It showed, Republicans said, that Democrats have been engaged in budgetary scare tactics.

The GOP plan landed as teachers were swarming the Capitol in weeklong demonstrations organized by their unions, declaring a “state of emergency” in California schools. They passed out blue books — like those used by college students for exams — to every legislator, demanding an essay on how to close the deficit.

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