Doomsday Plans

On the revenue side, reinstating the top bracket of the income tax — cut by former Governor Pete Wilson — would raise $3.1 billion. Restoring the full vehicle-license fee (also cut by Wilson) would raise $3.9 billion. Clearly, even with major cuts, that’s not enough to deal with a $35 billion shortfall.

A new 50-cents-a-pack cigarette tax backed by Davis during an earlier round of negotiations on the current budget would raise a few billion more. A sales tax on services is also talked about, which could raise upward of $5 billion. But the real money looks to be in corporate taxes, which yield far less revenue that most Californians suppose, less than a fifth the revenue from the personal income tax and less than a third the revenue from the state sales tax. Various tax expenditures, such as business tax credits, will be looked at with a hard eye, as will an increase in the overall corporate tax rate. Then there is the so-called split-roll property tax, which would alter Proposition 13 to tax business real estate at a higher rate than personal property. Depending on the various rates decided upon, these moves on the corporate-taxation front would raise billions more in revenue.

After THEGOVERNOR’S not especially glitzy Inaugural Gala — as part of the "new austerity," Davis PR experts all but canceled the traditional inaugural ball in favor of something more akin to a noisy street fair, though there was a band and some dancing — the Weekly and friend ran into the governor at a posh Capitol restaurant where he and first lady Sharon Davis had gone with their families. Perhaps under her influence, he seemed unusually relaxed away from his typical retinue of handlers.

Davis said he knows that the struggle over the budget crisis will be trying, with other players "laying down markers" for the debate to come. Yet he seemed fine with it, even a little Zen-like, if one can momentarily invoke the spirit of his former mentor and boss, ex-Governor Jerry Brown.