Simon Clarifies View on Returns

Republican gubernatorial nominee Bill Simon Jr. agreed Tuesday to release his income tax returns, but only if he wins the November election.

It was the first time Simon had made a distinction between his refusal to disclose tax records as a candidate and his willingness to do so as governor.

“If I filed a tax return when I was governor, I’m sure I would release that,” Simon said.

Since April 15, Gov. Gray Davis has demanded that Simon release his tax returns to prove he paid his fair share of taxes. Simon, a wealthy Pacific Palisades investment banker, has refused, saying the governor’s demand reminded him of Karl Marx and Big Brother.

“After you’re elected, you disclose your tax returns as part of your duties as governor, and that’s fine,” Simon told reporters between speeches to restaurant owners and manufacturers.

Candidates and elected officials are not required by law to disclose their tax returns, but Davis and many others routinely release theirs voluntarily. Simon argues that a financial disclosure report he was required to file in December provided ample information on his assets and sources of income.

The tax matter has distracted Simon’s campaign for more than a week. On Tuesday, Davis used the issue to deflect Simon’s criticism of the governor’s fiscal management. The state budget shortfall is projected to be as much as $20 billion.

“Mr. Simon has no standing on this issue,” the governor said, “because he won’t even reveal his income taxes, so we have no idea if he has contributed to the cost of running the government.”

Davis, who will release a revised budget proposal May 14, declined to offer specifics on how he will handle the shortfall.

“It will not be easy, but we’ll do it in a way that is fair,” he said.

Davis reiterated that he does not intend to propose a tax increase.

Simon said the widening budget gap reflects Davis’”inaction and inability to deal with a situation that’s gotten worse by the month, and we’re all going to pay for it.”

Simon, who has proposed spending cuts and other steps to save the state $13 billion, wouldn’t say how he would close the rest of the projected gap. But he said he could still cut the capital gains tax.

On another matter, the Simon campaign shifted course on fund-raising disclosure. On Monday, Simon called on Davis to release his schedule of fund-raising events--but the GOP challenger said he would release his own only “after I’m elected governor.”

On Tuesday, though, the Simon campaign pledged to release the candidate’s fund-raising schedule after all.

“We don’t want to call on the governor to do something we’re not willing to do,” said Simon spokesman Jeff Flint.

The governor, however, will keep his fund-raising schedule private, because donations ultimately are disclosed in reports available to the public, said Davis spokesman Roger Salazar.

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Times staff writer Mark Z. Barabak contributed to this report.