Apr 10, 2009 12:42 pm US/Pacific
Governor Stumps For Statewide Propositions In L.A.
LOS ANGELES
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Justin Sullivan/Getty Images
Gov. Arnold Schwarzenegger joined Los Angeles-area leaders today to seek support for six propositions on California's May 19 ballot that would extend tax increases and make other efforts to close a multi-billion-dollar state budget deficit.
California is facing a $42 billion shortfall in the coming fiscal year, and Schwarzenegger said at a morning news conference at the Los Angeles Area Chamber of Commerce that if the propositions don't pass, the state will be on the brink of financial collapse.
"What we have to do is make cuts and have revenue increases and on top of that is budget reform so this never ever happens again," Schwarzenegger said.
Proposition 1A, the "Rainy Day Budget Stabilization and Accountability Act," would extend the state's temporary 1-cent sales tax increase for a year and extend the vehicle license fee and personal income tax hikes for another two years, generating an estimated $16 billion for California.
The proposition would also require the state to put 3 percent of general fund revenues into a "rainy day" fund.
"If we don't pass these initiatives, California will go into bankruptcy," said Mayor Antonio Villaraigosa, who supports the six ballot measures. "The fact of the matter is we're in a crisis."
However, Proposition 1A is strongly opposed by the Howard Jarvis Taxpayers Association, which warns that now is the worst economic time to place additional tax burdens on California families.
On April 1, the sales tax in Los Angeles County went up to 9.25 percent, and on July 1 it will increase to 9.75 percent because of the voter-approved half-cent increase in the county sales tax to fund mass transit projects.
"Proposition 1A is a tax extension of the new (state) taxes just approved -- taxes that have already made us the highest taxed state in America. If Proposition 1A passes, you'll pay these higher taxes for up to an additional two more years. And, if we let them win here, these politicians and special interests will be encouraged to make higher taxes permanent," said Jon Coupal, president of the Howard Jarvis Taxpayers Association.
Also on the May 19 ballot is Proposition 1B, which would provide $9.3 billion to schools beginning in the 2011-12 fiscal year to make up for current cuts in education spending. The money would come from the contingency fund to be set up under Proposition 1A.
Proposition 1C would allow California to borrow $5 billion against future state lottery sales. Proposition 1D, the "Children's Services Funding," would redirect money from the tobacco tax to children's health and social services, while Proposition 1E would take money from the Mental Health Services Act to pay for children's health programs.
Under Proposition 1F, the governor, lawmakers and other state officials could not get a pay raise any time the state has a budget deficit.
"Props 1A though 1F will dramatically transform the budgetary process and provide greater accountability for how your money is spent. As the coalition continues to build -- with the addition of these Los Angeles area leaders --the voice of reform grow even louder for voters to approve these important fiscal measures. There is no time to wait," Schwarzenegger said.
(© 2010 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. Wire services contributed to this report.)
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