Brown Urges 17-Month Sales Tax Hike for Rebuilding : Politics: State treasurer proposes a quarter-cent temporary increase. She criticizes Wilson plan, which relies heavily on loans, because it incurs long-term debt.

State Treasurer Kathleen Brown on Friday proposed a quarter-cent temporary sales tax increase to raise $1 billion toward the cost of rebuilding from the Northridge earthquake.

Brown, a Democratic candidate for governor, criticized Republican Gov. Pete Wilson’s proposal for the state’s part of the earthquake recovery effort, which would rely heavily on new borrowing.

Michael Reese, Brown’s campaign spokesman, said the treasurer opposes a $1.05-billion bond measure that is the centerpiece of Wilson’s plan because it would take too long to enact and would saddle taxpayers with costs that should be paid now.

“It’s always been her belief that bonds should be for long-term investments,” Reese said. “This is an immediate crisis, not a long-term investment.”

Brown’s proposal would increase the sales tax for 17 months, which would raise about $1 billion. The state’s first-year share of the recovery cost is expected to be $1.7 billion.

She said $387 million could be raised by selling bonds that voters have authorized but which the Wilson Administration has not spent. This includes more than $200 million that has been available since 1990 to strengthen state buildings against earthquakes.

To cover the remaining amount, Brown endorsed Wilson’s idea of asking the federal government to lend California $334 million. That is the amount the state will be required to pay in matching funds as a condition of receiving more than $9 billion in federal aid.

The sales tax varies by county. It ranges from a low of 7.25% in 37 counties to 8.5% in San Francisco. The rate in Los Angeles County and six others is 8.25%.

The Legislature approved a quarter-cent, 13-month sales tax after the 1989 Loma Prieta earthquake. Another temporary increase, of a half-cent for general purposes, was enacted at Wilson’s urging in 1991 and extended by voters in November, with the money going to local government.

Wilson contended Thursday that the state’s fragile economy cannot withstand another tax increase.

He proposed a $1.05-billion bond measure to pay for reconstruction of public buildings and loans to homeowners to help them rebuild.

Wilson also called for about $300 million in unspecified cuts in the state budget, along with the $334-million federal loan that Brown endorsed.

Wilson’s bond proposal would cost taxpayers more than $600 million in interest over a 20-year period.

The governor’s campaign spokesman criticized Brown’s plan even before she released it.

“It’s not courage for Kathleen Brown to call for new taxes--it’s reflex,” said Dan Schnur, communications director for the Wilson campaign. Noting that the two other Democratic candidates--Insurance Commissioner John Garamendi and state Sen. Tom Hayden--also proposed raising taxes, Schnur referred to the Democratic primary campaign as “the battle of the taxers.”

Shortly after the earthquake, Garamendi proposed a half-cent sales tax increase and a 2-cent gasoline tax increase, each to run for one year. Hayden has also proposed a temporary, quarter-cent sales tax.

“Kathleen Brown has finally acknowledged publicly what John Garamendi has been saying since Day 1,” said Darry Sragow, Garamendi’s campaign director. “From the get-go, John Garamendi has been telling everyone that we’re going to need a tax increase.”

But Sragow said Brown’s proposal is incomplete because there is no guarantee that the federal government will allow the state to delay payment of its matching funds. Even if Washington goes along, he said, the scheme will add to the state’s budget problems when the bill comes due in the years ahead.

“She’s trying to do this with half a loaf,” Sragow said. “She’s trying to play both sides.”

But Reese said Brown’s plan makes sense because it minimizes the taxes needed by using the proposed federal loan and authorized bonds.

Although legislative leaders have given at least lukewarm support to Wilson’s plan, and no tax increase seems likely without his backing, Reese said Brown believes the solution is still open to debate in the Legislature.