Schwarzenegger to propose sales tax hike, cuts in services
The governor's budget plan would raise the sales tax by 11/2 cents on the dollar, sources say. His proposals for dealing with a $24-billion shortfall will be unveiled today.
Reporting from Sacramento — Gov. Arnold Schwarzenegger is expected to unveil a plan today for a steep sales tax increase and deep cuts in services to wipe out a budget shortfall that is expected to swell to more than $24 billion by the middle of 2010, according to Capitol staffers with knowledge of the proposal.
The linchpin of the governor's plan is the sales tax increase of 1 1/2 cents on the dollar, which could raise more than $10 billion through fiscal 2009-10. Such a tax is likely to face resistance from Republicans, who blocked a smaller increase proposed by the governor last summer and have vowed to continue to do so.
Sales tax in Los Angeles would shoot up to 10.25% if the governor's newest plan were to be approved. That would include a half-cent sales tax hike that Los Angeles voters apparently passed on Tuesday to fund transit projects. The statewide sales tax rate is 7.25%.
The governor's proposal also includes cuts of several billion dollars to schools, healthcare programs and law enforcement.
The plan will be unveiled at 10 a.m., when Schwarzenegger officially calls the sitting Legislature back to town for an emergency session on the budget. Lawmakers will have until the end of the month to take action.
The new class of lawmakers, elected Tuesday, takes office Dec. 1.
Halper is a Times staff writer.
Evan.halper@latimes.com
