SACRAMENTO — California's Democratic leaders were planning a vote today on a brazen proposal to raise gas, sales and income taxes through a series of legal maneuvers that would bypass the Legislature's minority Republicans.
The Democratic gambit, announced Wednesday, would raise $9.3 billion to ease the state's fiscal crisis by increasing sales taxes by three-fourths of a cent and gas taxes by 13 cents a gallon, starting in February. The plan would add a surcharge of 2.5% to everyone's 2009 state income tax bill.
It would also require businesses to withhold taxes on payments above $600 made to independent contractors, as they are now required to do with salaried employees.
In addition, the Democrats said they would cut $7.3 billion from schools, healthcare and other programs. Their package would total $18 billion and nearly halve the state's budget shortfall, projected to reach $41.8 billion in the next 18 months.
Both the Assembly and Senate planned to vote on the package today. Late Wednesday, Democratic lawmakers were negotiating with Gov. Arnold Schwarzenegger over items he wanted included in the proposal before he would support it.
Inside the Capitol, the strategy is considered revolutionary, because it would sideline the GOP. Though Republicans are a minority in both houses of the Legislature, they have repeatedly blocked tax increases and thwarted budgets they did not like, because California is one of only three states mandating a two-thirds vote for both budgets and tax increases. Achieving that threshold requires some Republican votes.
"I still believe in bipartisanship," Senate President Pro Tem Darrell Steinberg (D-Sacramento) said at a Capitol news conference. "But there is an even greater responsibility than practicing bipartisanship, and that is to govern. And that is what we intend to do here today."
Republican legislators and antitax groups promised legal challenges to derail the Democrats' plan.
"Raising taxes on people and playing funny math and calling it fees is not governing," said Assembly GOP leader Michael Villines of Clovis. "That's trickery, is what that is."
The plan hinges on a legal distinction made by judges that a tax is imposed broadly and used for general government purposes, while a fee is charged to users of a specific benefit provided by government, such as a road.
The proposal would employ an arcane loophole in state law that lets legislators pass a tax bill with a simple majority vote -- if the bill does not raise more revenue.
