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Governor Schwarzenegger Puts a New Tax on the Table


Governor Arnold Schwarzenegger has put a tax increase on the table. 

Democratic and Republican sources close to the budget negotiations say he's proposed a temporary, one-cent hike in the California sales tax as part of a deal.

However, the governor's press secretary won't confirm the report.

The Governor is proposing the tax as part of a deal that would include budget reform. That could include a spending cap, which he's been pushing for some time.

But Republicans say the proposal is a non-starter. GOP Assemblyman Roger Niello says it's not the right move in this economy.

Niello: We continue to believe that any broad-based rate increases sales or income, especially in the face of a very weak economy is just simply not the way to go to solve this year's budget problem.

Niello says Republicans are open to closing some tax loopholes to bring in new revenue.

The state faces a $15 billion shortfall and lawmakers are more than a month late passing a budget.

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