Last Friday, UC President Yudof warned the CA state Legislature about the drastic fiscal measures the UC Regents may need to take if Governor Brown’s tax extensions are not passed. Let’s be clear on what these taxes are. They were passed as temporary revenue solutions by the Legislature for the 2009-2010 budget, and in Brown’s proposed budget for next year they include the following:

0.25-percentage point surcharge on state income taxes

0.5-percentage-point increase in the vehicle license fee

1-cent increase in the state sales tax rate and a reduction in the tax credit for dependents, from $300 to $99

Change in corporate tax law that would generate $942 million for the state, mostly by raising taxes on businesses whose headquarters are outside California.

Elimination of Enterprise Zone tax credits for corporations, which would save the state $581 million.

–LA Times

The non-profit, non-partisan California Budget Project phrases [PDF] it slightly differently:

$14.0 billion in “revenue solutions” including $11.2 billion of 

temporary tax extensions ($5.9 billion of which would support the proposed realignment), $1.4 billion from modifying single sales factor apportionment, and $0.9 billion from the elimination of Enterprise Zones. The Governor’s tax proposals would increase the state’s school spending guarantee by an estimated $2.0 billion.

A five year extension of these taxes, as proposed by Brown, would prevent the drastic changes to our social institutions that an all-cuts budget would mean. So how do we pass these tax extensions?

During the 2010 gubernatorial election, Brown promised that his administration would make “no new taxes without voter approval.” There are two ways to put a proposition on the general election ballot; through a vote in the Legislature, or through a signature-gathering petition process.

Gov. Brown has spent this year attempting the legislative process, but after months of negotiations with GOP representatives he gave up because he could not get the 2 Republican votes needed in each house to have the two-thirds supermajority required to put the extensions on the ballot. Only legislative actions concerning revenue and budget require this supermajority.

With the legislative route blocked, Gov. Brown may begin collecting the popular signatures required to put the tax extensions on the ballot. Or, he could renege and simply submit the extensions to a legislative vote. He has not yet indicated his next step, but will release a revised budget on May 16.