Friday, September 5, 2008


By Dan Smith and Jim Sanders - Sacramento Bee

Published 6:18 pm PDT Friday, September 5, 2008

Breaking its long practice of opposing tax increases, the California Taxpayers' Association on Friday agreed to support Gov. Arnold Schwarzenegger's state budget proposal, including a sales tax boost.

The 82-year-old association is a non-profit representing all taxpayers, but some of California's largest corporations dominate its sizeable board of directors, which voted 28-19 to back the proposal Friday.

Schwarzenegger's latest spending proposal would close the state's $15.2 billion budget gap, in part, by imposing a three-year, one-cent-on-the-dollar sales tax increase on most taxable products, except gasoline and diesel fuel.

The boost would raise $4 billion this year and $9.9 billion more over the next two years, but be replaced by a 1.25-cent decrease on Sept. 1, 2011.

That decrease, along with long-term budget changes Schwarzenegger is proposing, played into the group's decision.

"As an association representing taxpayers, we have not arrived at our position lightly," said CTA President Teresa Casazza, in a statement. "Given the current circumstances, however, we can support a temporary sales tax increase as long as it is accompanied by meaningful budget reform, an economic stimulus plan and a future reduction in the sales tax rate that will make the change a net tax reduction over time."

The state is 67 days into the fiscal year without a budget, the longest the state has ever gone.

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