- Associated Press - Monday, January 10, 2011

SACRAMENTO, Calif. (AP) — Gov. Jerry Brown proposed a budget Monday that would slash funding to most areas of state government and maintain a series of tax increases for five years to close California’s huge budget deficit.

The Democratic governor released his first budget proposal since winning election last fall. He called for $12.5 billion in spending cuts, including reductions in welfare, social services and health care for the poor as well as a combined $1 billion cut to the University of California and California State University systems.

Mr. Brown also wants the Legislature to call a special election in June to give voters an opportunity to continue increases in the income, sales and vehicle taxes for five years. His proposal relies on new revenues of $12 billion.

The governor’s office said the only area of state spending he would protect is K-12 education.

Mr. Brown said his recommendations would close an 18-month budget gap estimated at $25.4 billion and require sacrifice from all Californians.

“For 10 years, we’ve had budget gimmicks and tricks that pushed us deep into debt. We must now return California to fiscal responsibility and get our state on the road to economic recovery and job growth,” he said in a statement.

Mr. Brown also has said he will seek to fundamentally restructure state government, shifting a host of responsibilities from the state to counties and cities, a process he has acknowledged will be complicated and controversial.

That includes eliminating redevelopment agencies and ending tax breaks available to businesses that operate in depressed areas designated as enterprise zones.

Mr. Brown said Monday that if voters approve, revenue generated from the sales tax and vehicle license fees currently set to expire in July would go to local governments to help pay for the changes.

The governor’s proposal to extend taxes will require support from Republicans in the Legislature who have vowed to oppose all taxes. It’s a politically risky move after Californians rejected an extension of the taxes just two years ago as part of a package of ballot measures.

Mr. Brown campaigned on a promise not to raise taxes without voter approval.

“Without decisive action, the state’s severe budget problems will persist, threatening economic recovery, job growth, public education and the quality of life in California,” Mr. Brown said. “The adoption of this budget will position the state to lead the country as it slowly recovers from the Great Recession.”

Mr. Brown’s proposal also assumes the Legislature would pass a spending plan by March — a date unheard of in recent legislative budget debates, which have dragged on into the fall.

Voters in November lowered the threshold for budget passage to a simple majority.

The governor also is seeking an 8 percent to 10 percent cut in pay for state workers who aren’t covered by union-negotiated contracts, which he said would save the state about $308 million.

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