From oil to alcohol, Governor Arnold Schwarzenegger has proposed billions in tax increases on goods and services. He thinks the money will help to fill an eleven-billion-dollar hole in the California state budget. And as Marianne Russ reports from Sacramento, he's also pushing for billions in cuts.
Governor Schwarzenegger has called a special session of the legislature to address the ballooning deficit. He says the stock market dip and housing slump leave the state with few choices.
Schwarzenegger: We have a dramatic situation here and it take dramatic solution and immediate action. We must stop the bleeding.
His solution involves a laundry list of tax hikes. The centerpiece is a bump in the sales tax of one-and-a-half percent - for three years. He also wants to permanently expand the sales tax to services like car repairs, sporting events and amusement parks.
Other hikes include a nickel a drink on alcohol, and an oil severance tax of nearly 10 percent. He also wants to add 12 bucks to the vehicle registration fee.
His plan also calls for four-and-a-half billion in cuts - mostly to education and social programs. And he's included cost-cutting measures like furloughing state workers one day a month and eliminating two state holidays.
