Panel OKs Plan With Variety of Tax Breaks

California couples could receive a one-time sales tax rebate of as much as $250, and the amount that people can claim for children and other dependents would permanently rise by $125 under a tax plan approved by the Legislature’s powerful budget-writing committee over the weekend.

Lawmakers were on the verge of reaching a final package late Sunday night after approving a $2.7-billion plan to deliver $850-million in permanent and $1.85 billion in one-time tax breaks.

In another budget-related matter Sunday, members of the Senate-Assembly budget conference committee approved spending $2 billion to implement the first year of Gov. Gray Davis’ $5.3-billion, five-year transportation plan. Funding for the governor’s traffic-relief plan had been a sticky issue throughout last week, with the Assembly pushing for a $2.5-billion plan.

Committee members hope to finalize their version of the budget so that the full Legislature can vote on it by a June 15 deadline.

More than any year for at least a decade, the budget conference committee has wielded unusual influence. Its members are in constant contact with the leaders of both houses and have met several times with Davis and his top aides. The committee members include Senate Republican leader Jim Brulte of Rancho Cucamonga, who is that party’s most influential lawmaker and has the power to deliver enough votes to pass the budget recommendations, which still must be approved by the full Legislature.

The committee’s plan includes a $1.7-billion sales tax rebate that calls for individuals earning less than $20,000 to receive rebates of $50 each, or $100 a couple. The state would bestow $125 checks on those earning more than $150,000 a year, or $250 a couple.

But the bulk of the tax break would be showered on individuals earning between the two amounts. Californians who fall into the latter category would receive $100 each under the plan, or $200 a couple.

“That, roughly speaking, puts about $1.1 billion to middle-class taxpayers making from $20,000 to $150,000,” Senate Budget Committee Chairman Steve Peace (D-El Cajon) said.

The plan differs from a proposal pushed by Davis last month to give a rebate of $150 to all individuals who pay income taxes, or $300 for joint filers. Davis’ plan was met with opposition from Democrats and Republicans in the Legislature because it left out low-wage workers who do not pay state income taxes and because it would have triggered an increase in the rebate recipients’ federal tax bills.

The tax cut plan approved over the weekend boosts the amount that individuals can claim in state income tax deductions for children and other dependents to $125 to $130, at a cost of about $500 million, or about half the amount sought by Brulte, who had called for the deduction to be raised to the current federal level.

Committee members also approved a tiered tax break designed to save teachers $200 million a year. The plan would bestow a $250 tax break on beginning teachers and $500 for teachers with at least five years’ experience. The figure would grow to $1,000 for educators who have taught for 10 years or more. Davis had sought to eliminate state income taxes for public school teachers.

Still at issue is how to divvy up about $400 million in park bond money being made available through a $2.1-billion bond that voters approved in March. Lawmakers spent Sunday prioritizing projects within each caucus.

“We want to make sure there is a fair distribution statewide,” said Sen. Charles Poochigian (R-Fresno), who filled in for Brulte Sunday on the six-member budget-writing panel.

Also unresolved are the projects that members of the Legislature request each year, with each house of the Legislature expected to receive $150 million to fund the requests. Such requests typically benefit an individual member’s district as opposed to projects with statewide benefits such as transportation or prisons.