Speaking at the monthly luncheon of the Sacramento Press Club, Senate President pro Tem Darrell Steinberg said that the “Big Five” had agreed on a “framework” but that contrary to some press reports, there was no “deal” on the budget. Steinberg stated that he was committed to honoring the “cone of silence” that has descended over budget negotiations and provided virtually no information on the contents of the emerging framework.
Careful listeners could glean that the “framework” includes a new limit on state spending and no permanent tax increases. In response to a question as to what taxes would be increased, Steinberg answered that the reporters who had written about the issue in the Los Angeles Times and the Sacramento Bee were “good reporters.” These stories suggest that the deal would include a 1 cent increase in the state’s sales tax rate, a 12 cent per gallon increase in the gasoline tax, a doubling of the Vehicle License Fee rate – although the new rate would remain lower than the pre-late 1990s tax rate – and a 0.25 percentage point personal income tax surcharge. The duration of the tax increase would depend on whether voters approve the proposed limit on spending. If voters approve the limit, the new taxes would stay in effect five years. If voters turn down the cap, the new taxes would sunset in approximately two years.
Steinberg also essentially confirmed that the framework includes a large corporate tax cut, such as the one we blogged about in our last post and that Sacramento Bee columnist Dan Walters wrote about in his morning column. Steinberg stated that a vote on the framework was expected sometime in the next several days.
— Jean Ross