S.D. Politicians Back Tax Hikes in State Budget : Finance: Most area lawmakers at state Capitol agree that $14.3-billion deficit requires some kind of tax increase.

If San Diego lawmakers have their way, it will soon cost you more to buy this newspaper. You’ll have to dig deeper to afford that Snickers bar, and pay higher prices for admission to Sea World or the Padres game.

And if you’re rich, they want you to fork over more to the state government in income taxes come April.

Those are just some of the ways that a majority of San Diego’s 10-member delegation wants to “spread the pain” among its constituents and other Californians stemming from the state’s monumental $14.3-billion budget deficit.

The unprecedented gap between what the state will take in and what it could spend next year has everyone talking about higher taxes and lower services. And in some cases, area legislators are advocating approaches to those politically sensitive problems that are in direct opposition to those being touted by favorite son Gov. Pete Wilson.

For instance, the San Diegans say they will not go along with Wilson’s request to make more than $2 billion in education cuts by lifting Proposition 98, the voter initiative that requires about 40% of the general fund to be used for public schools.

Eight of the 10 lawmakers--including Republicans--said they are willing to effectively make about $880 million in education cuts but don’t want to lift the Proposition 98 mandate for more.

Yet the lawmakers also agree with Wilson on one overarching point: The staggering budget deficit leaves no alternative but to hold their noses and vote for some kind of tax increase.

“I think any one of us would veer away from a tax increase,” said Sen. William A. Craven (R-Oceanside), an 18-year veteran of legislative budget wars. “But I think if you’re going to be pragmatic--and you’ve got to be at a time like this--you have to be cognizant of the fact that there’s little or no alternative.”

Even Assemblyman Robert C. Frazee (R-Carlsbad), who says he will hold the line against taxes for now, admits reality may weaken his resolve during the final budget crunch this month, when so many proposals circulate through Sacramento like quarters in a Las Vegas slot machine. The state Constitution requires the Legislature and governor to enact a budget by June 15, but deliberations often drag on past that deadline.

“Not everyone will admit it, and a lot of people say we can get ourselves out of this without a tax increase, but I don’t think cuts of that scale are achievable” to balance the budget, said Frazee. “So, ultimately, some tax increase is going to have to be part of the package.”

Given that fact of political life, however, the delegation is deadlocked 5-5 over one of the biggest questions of the budget year--whether to follow Wilson’s advice and enact a 1 1/4-cent sales tax increase. The sales tax hike is the cornerstone of the governor’s plan to bring an infusion of new money to state coffers.

“I know that, in certain ways, it is a regressive tax, as far as the people who are somewhat on . . . the indigent side. It means a hell of a lot to them,” said Craven. “. . . but something has to be done and that seems like the logical, easiest way to do it.”

Yet an odd alliance of local Democrats and Republicans said they would resist the governor’s suggested increase. Among them were Assemblyman Steve Peace (D-Rancho San Diego).

“In a broad sense, I don’t think it makes sense to put a sales tax in effect in the fourth quarter of a year, at a time when the performance of the economy is really the only thing that’s going to get us out of this box,” said Peace. “Otherwise, we’ll be dealing with the same kind of deficit situation next May.”

But a majority of the San Diegans, Peace included, were in agreement on increasing other kinds of taxes, sometimes at odds with Wilson.

One proposal--vigorously opposed by the governor--would increase the income tax rate for the wealthiest Californians--single people making $100,000 and couples earning $200,000. An Assembly measure raising the top rate for the rich from 9.3% to 11% failed last Tuesday, but a more modest measure calling for a 10% tax rate passed the Senate late Thursday.

San Diegans in both houses voted 6-4 in favor of the higher income taxes.

“I believe in the decade of the ‘80s, the wealthy did very well,” said Assemblyman Pete Chacon (D-San Diego), one of those who voted to raise the taxes. “Because of the Reagan policies, the rich got richer and the middle-income, lower-income people got poorer. . . . The rich are definitely not paying their fair share.”

Seven of the 10 area lawmakers say they are also willing to support a fistful of additional taxes, including a measure that would remove sales tax exemptions for periodicals, candy, snack foods and tickets to sporting events or and entertainment attractions. These items are currently exempt from the county’s 7% sales tax.

If approved, the new taxing measures--most of which are supported by Wilson--would increase ticket prices to Padres, Chargers, and Sockers games, as well as admission to Sea World and movie theaters by 7%. Newspapers, candy bars, crackers, chips and other snack items would also be subject to 7% sales tax.

While legislators from areas such as Orange County, which relies heavily on Disneyland for the tourism dollar, have denounced the entertainment-admission taxes as economically damaging, San Diego lawmakers said they considered it one of the most palatable.

“I don’t go to the movies, except to see the old ones on TV,” said Sen. Lucy Killea (D-San Diego). “I have a son who is a great moviegoer. If he can afford $7 to go, he can afford a tax on it.”

On the other end of the budget equation, the San Diegans said they were more than willing to cut spending programs as well to whittle away the deficit. But even in this, they failed to back Wilson in a major way--cutting welfare payments by 8.8%.

Only half of the San Diegans agreed with the Wilson plan, which would bring the average monthly subsidy for a mother and two children from $694--the second highest in the nation--to $633.

Assemblywoman Carol Bentley (R-El Cajon) was on the governor’s side, saying the cut was necessary to stem the rising tide of welfare-seekers emigrating to California and settling down in rural areas such as Butte and Lake counties.

“We’re seeing just an expansion of our welfare rolls,” said Bentley. “Certainly, it shows that those who are seeking public assistance are really quite bright. Why not come to California, where you get much more generous benefits than you do in other states?”

But half of the San Diegans said they would spurn Wilson’s idea for a milder legislative compromise that would cut the welfare payments by only 4%. Even at that, some were uncomfortable at taking money from the poor.

“I’m not happy, but I’ll accept it as part of a larger deal,” said Assemblyman Mike Gotch (D-San Diego).

San Diegans also favor, by 7-3, some kind of reduction in the refundable income tax credit given to renters. Wilson wants to save $210 million in tax rebates by scaling back the credits from $120 to $70 per couple, and from $60 to $35 for an individuals.

Assemblywoman Tricia Hunter (R-Bonita) is carrying a bill that would do away with the credits for anyone who doesn’t pay taxes--a measure she said would eliminate a “backdoor welfare payment” to college students and the very poor.

And Sen. Wadie P. Deddeh (D-Bonita) said reduction in the credit is only fair, if everyone else is going to suffer under the next state budget. “If welfare recipients are going to participate in the pain, if the educational establishment is going to participate in the pain . . . so should the renters,” he said.

However, the delegation is at odds with Wilson over proposed cuts in the state corrections budget.

The governor said he will not countenance such reductions, but legislative leaders want to remove $300 million from the state prisons budget by loosening parole supervision and not sending former convicts back behind bars for minor probation infractions not related to their crimes.

Assemblywoman Dede Alpert (D-Del Mar) last week weighed the proposed prison cuts, tax increases and other politically tortured choices and articulated the kind of mixed feelings that spoke for all of her San Diego colleagues.

“It’s a budget that’s filled with all sorts of horrible things and tough choices, but it has to be done,” she said.

Legislative Scorecard

How San Diego’s lawmakers stand on major points of the budget now being negotiated between legislative leaders and Gov. Pete Wilson. Many lawmakers said their positions could change depending on how the final budget proposal is put together.

SENATORS

William Wadie Lucy Craven Deddeh Killea Issue R-Oceanside D-Bonita D-S.D. Gov. Pete Wilson’s proposal No unsure No to suspend Prop. 98, which guarantees 40% of state revenue for education. Wilson’s proposed 1 1/4-cent Yes Yes Yes sales tax increase. Proposals to initiate a sales Yes Yes Yes tax on newspapers, candy, snack foods and admission to entertainment or sporting events. Higher income taxes for the rich No Yes Yes (These votes were taken in both the Senate and Assembly last week.) Wilson’s proposed welfare cuts of 4% Either 4% 8.8% or a less drastic reduction of 4% suggested by a legislative conference committee. Cut the prison budget. Yes Yes Yes Willing to reduce the Yes Yes Yes renter’s income tax credit.

ASSEMBLY MEMBERS

Deirdre Carol Alpert Bentley D-Del Mar R-El Cajon Gov. Pete Wilson’s proposal No No to suspend Prop. 98, which guarantees 40% of state revenue for education. Wilson’s proposed 1 1/4-cent Yes No sales tax increase. Proposals to initiate a sales Yes No tax on newspapers, candy, snack foods and admission to entertainment or sporting events. Higher income taxes for the rich Yes No (These votes were taken in both the Senate and Assembly last week.) Wilson’s proposed welfare cuts of 4% 8.8% 8.8% or a less drastic reduction of 4% suggested by a legislative conference committee. Cut the prison budget. Yes Yes Willing to reduce the Yes Yes renter’s income tax credit.

Pete Steve Robert Chacon Peace Frazee D-S.D. D-Rancho S.D. R-Carlsbad Gov. Pete Wilson’s proposal No No No to suspend Prop. 98, which guarantees 40% of state revenue for education. Wilson’s proposed 1 1/4-cent No No No sales tax increase. Proposals to initiate a sales Yes Yes No tax on newspapers, candy, snack foods and admission to entertainment or sporting events. Higher income taxes for the rich Yes Yes No (These votes were taken in both the Senate and Assembly last week.) Wilson’s proposed welfare cuts of 4% 8.8% 8.8% 8.8% or a less drastic reduction of 4% suggested by a legislative conference committee. Cut the prison budget. Yes Yes Yes Willing to reduce the No No Yes renter’s income tax credit.

Mike Tricia Gotch Hunter D-S.D. R-Bonita Gov. Pete Wilson’s proposal No unsure to suspend Prop. 98, which guarantees 40% of state revenue for education. Wilson’s proposed 1 1/4-cent Yes No sales tax increase. Proposals to initiate a sales Yes No tax on newspapers, candy, snack foods and admission to entertainment or sporting events. Higher income taxes for the rich Yes No (These votes were taken in both the Senate and Assembly last week.) Wilson’s proposed welfare cuts of 4% 8.8% 8.8% or a less drastic reduction of 4% suggested by a legislative conference committee. Cut the prison budget. No No Willing to reduce the No Yes renter’s income tax credit.