Since Schwarzenegger took office two years ago with a vow not to increase taxes, Democrats have doubled their efforts to more aggressively collect the taxes already on the books.
Their push was given a boost early in Schwarzenegger's tenure, when an enforcement measure signed into law during Gov. Gray Davis' last days in office unexpectedly began to bring in billions of dollars.
The law gave taxpayers suspected of using illegal shelters a grace period to pay all they owed -- while increasing penalties for those who didn't.
Thousands of invitations to join the amnesty were sent to individuals and businesses suspected of hiding profits. The initiative netted the state more than $4 billion.
That money flowed into California's coffers amid deliberations over the 2004-05 budget, when lawmakers had a huge deficit to overcome. They used the money to avoid some cuts in healthcare, social services and other government programs.
Democrats used the momentum to pass another amnesty last year. That measure was broader; even companies involved in complicated tax disputes had to pay millions of dollars to the state before their cases were resolved or face stiffer penalties if they lost.
"There is a residue of bad feeling in the business community about that," said Ron Roach, spokesman for the California Taxpayers Assn.
Roach said Cal-Tax, whose president sits on the board of a campaign committee allied with Schwarzenegger, did not submit official letters opposing bills the governor vetoed. But Roach said the association was pleased that they were all blocked.
One of the issues Cal-Tax has been most vocal about is the need to preserve California's tax breaks for businesses.
For the second year in a row, Schwarzenegger declined to sign a bill that would have forced the state to take a closer look at the tax breaks it gives businesses and whether they are creating jobs, their intended effect.
The bill's author, Assemblyman Mark-Ridley Thomas (D-Los Angeles), said state officials analyzed only how much the tax breaks cost in lost revenue -- not whether they stimulated the economy.
Schwarzenegger said current studies were sufficient and called the measure, AB 168, "redundant and unnecessary."
