Bloomberg News

Occidental Boosts Brown Campaign for Higher California Taxes

January 26, 2012

Jan. 24 (Bloomberg) -- California Governor Jerry Brown’s campaign to raise income and sales taxes to avoid deep cuts to schools collected $1.45 million from Occidental Petroleum Corp., American Indian gaming interests, hospitals and a building- trades union, reports show.

Occidental, the fourth-largest U.S. oil company, donated $250,000 to support the voter initiative, according to reports filed with the secretary of state as of Jan. 21. Backers need to collect 807,615 signatures for Brown’s measure to qualify for the November ballot.

Brown want voters to temporarily raise California’s highest-in-the-nation sales tax to 7.75 percent and boost income taxes on individuals earning more than $250,000. The 73-year-old Democrat estimates the increases would raise $6.9 billion the first year to balance the budget.

“We’re concerned about the state’s continuing budget deficit, in general, and the potential adverse effects of these cumulative deficits on the education system,” Melissa Schoeb, a spokeswoman for Los Angeles-based Occidental, said in an e- mailed response to questions. “A strong education system is critical to our ability to attract and retain top-flight talent.”

The initiative received $500,000 from the California Association of Hospitals and Health Systems’ political arm. Jan Emerson-Shea, a spokeswoman for the association, said healthcare providers have been hurt by cutbacks to Medi-Cal, the state’s version of the Medicaid program for the poor.

Union Contribution

A contribution of $250,000 was made by the State Building & Construction Trades Council of California, according to the filings. Budget cuts have imperiled public-works projects that are important to union laborers, said Sandy Harrison, a spokesman for the council.

Indian gaming interests contributed $303,100 toward the effort, the reports show. Representatives of the Paskenta Band of Nomlaki Indians, which operates a casino near Corning, and the Lytton Band of Pomo Indians, which runs the San Pablo Lytton Casino, didn’t return telephone calls requesting comment on their donations of $100,000 each.

Brown’s plan calls for a four-year increase in sales taxes to 7.75 percent from 7.25 percent, and a five-year boost in tax rates for the wealthy.

Individuals earning $250,000 to $300,000 would pay 10.3 percent, up from 9.3 percent. For those earning $300,000 to $500,000, the rate would be 10.8 percent. Single filers with income above $500,000 would pay 11.3 percent.

Those earning $1 million or more would pay 12.3 percent under a 2004 ballot measure earmarking the extra 1 percent for mental-health services.

Education Spending Cuts

Brown faces a budget deficit of $9.2 billion. If voters reject the tax proposal, Brown has said he would cut $4.8 billion from schools, the equivalent of taking three weeks from the academic year.

Brown’s political adviser, Steve Glazer, said by e-mail that a “broad cross-section” of businesses and individuals have expressed support for the tax campaign.

“I’m confident we will have the resources to conduct a successful campaign,” he said.

No political committee has yet been announced to oppose the initiative. Jon Coupal, executive director of the Howard Jarvis Taxpayers Association, and Kris Vosburgh, the anti-tax organization’s executive director, didn’t return telephone calls or e-mail messages yesterday seeking comment on Brown’s measure.

--Editors: Pete Young, Mike Millard

To contact the reporter on this story: James Nash in Sacramento at jnash24@bloomberg.net

To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net


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