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.
-- Evan Halper
Photo: Los Angeles Times