Wilson, Brown Move Closer on Fate of Sales Tax

The two major antagonists in last summer’s state budget deadlock took tentative steps toward each other Tuesday on a crucial issue holding up enactment of this year’s spending plan: extension of a temporary sales tax due to expire June 30.

Until now, Democratic Assembly Speaker Willie Brown had insisted that the half-cent levy be extended for at least a year and used for state programs. Republican Gov. Pete Wilson has said he wants the tax to expire on schedule.

But Tuesday, Brown said he may be satisfied with a proposal to extend the tax only through November, when voters in some counties may be asked to continue it as a local tax.

Wilson’s top spokesman, meanwhile, said the governor’s major objection to extending the tax is that, under current law, the money raised--estimated at $1.4 billion annually--would go to state services instead of local programs. That is an obstacle that could be overcome by new legislation.

Together, the signals sent by the two leaders--if they evolve into full-fledged positions--could make it much easier for the Legislature and the governor to come to terms on a budget for the fiscal year that begins July 1.

Brown clarified his stand on the sales tax issue as he delivered a pessimistic assessment of Wilson’s proposed shift of $2.6 billion in property tax revenue from local governments to schools. Wilson wants to transfer the property tax money so he can keep a commitment on public school funding without further depleting the state’s scarce resources.

Although Brown has supported the idea, he said Tuesday that he believes the proposed tax transfer lacks the votes in either house of the Legislature to be enacted. Support would be stronger, he said, if the sales tax were extended for at least six months and dedicated to local government services.

Wilson has called a statewide election for Nov. 2 and told county governments that they should seek voter approval for a half-cent local tax if they need the money to fund their programs.

“We are responsible people; we do what we practically can,” Brown said, explaining why he and other Democrats might agree to a short-term extension of the tax. “We’re not going to hold this budget up on the basis that we are more pure than the governor.

“I certainly will not (withhold my vote) on the basis that the continuation of the sales tax is not in my image. That’s not the art of compromise.”

Although Wilson reportedly has privately told law enforcement officials and Republican lawmakers that he would consider a six-month extension of the sales tax, he has been silent on the subject in public and his aides have tried to steer discussion elsewhere.

But Tuesday, Wilson’s chief spokesman, Dan Schnur, said Brown “deserves a lot of credit” for saying he would agree to a six-month extension of the tax. Schnur’s comments left the impression that the Administration’s objection to extending the tax are more technical than philosophical. The major obstacle, he said, is finding a way to direct the sales tax revenue to local government.

“The problem with extending the state sales tax is that the money doesn’t go where it needs to,” Schnur said. “A state sales tax increase gets spent at the state level. What we’re looking to do is provide a way for local governments to ensure their public safety and their law enforcement services. A state sales tax doesn’t accomplish that.”