SacBee CapAlert | Steve Wiegand | November 6, 2008
With California facing a $11.2 billion shortfall in the current year and another $13 billion next year, Gov. Arnold Schwarzenegger has proposed a mixture of tax hikes, spending cuts and state worker furloughs to help balance the books.
Steve Wiegand has an overview of the plan.
Here is the full list of new revenues Schwarzenegger wants to bring in:
Temporary sales hike: Effective Jan. 1, 2009, Schwarzenegger would raise the state sales tax by 1.5 percent for three years, from 5 percent to 5.6 percent. At the end of three years, the rate would return to 5 percent.
Over the summer, the governor proposed a temporary 1-cent sales tax hike followed by a .25 cent cut - but Republicans rejected the proposal.
What it would bring in: $3.54 billion 2008-09 and $7.3 billion in 2009-10
Add tax to services: Effective Feb. 1, 2009, Schwarzenegger would begin taxing certain services that are currently untaxed at the new 6.5 percent sales tax rate. Those include appliance repair, furniture repair, vehicle repair, golf and veterinarian services.
As of March 1, Schwarzenegger would tax amusement park and sports evenings. Unlike the sales tax rate increase, the broadening to services appear to be permanent.
What it would bring in: $357 million in 2008-09 and $1.15 billion in 2009-10.
Oil severance tax: Effective Jan. 1, 2009 Schwarzenegger would tax oil extracted from the ground or water in California at a rate of 9.9 percent of the gross value.
What it would bring in: $528 million in 2008-09 and $1.195 billion in 2009-10
Nickel-a-drink tax: Effective Jan. 1, 2009 Schwarzenegger would hike the alcohol taxes in the stat by a nickel per drink (defined as 1.5 ounces of liquor, 12 ounces of beer, or 5 ounces of wine)
What it would bring in: $293 million in 208-09 and $584 million in 2009-10.
Vehicle registration fee: Effective Feb. 1, 2009, Schwarzenegger would raise vehicle registration fees by $12.
What it would bring in: $150 million in 2008-09 and $359 million in 2009-10.