Gov. Jerry Brown had pointed words for state lawmakers Thursday, as he testified before a budget committee at the state Capitol. (Rich Pedroncelli / Associated Press / February 24, 2011)

By Anthony York and Shane Goldmacher, Los Angeles Times
February 25, 2011

Reporting from Sacramento —

Gov. Jerry Brown said Thursday that he would hold out for a budget that cuts more than $25 billion from state services if voters and lawmakers do not approve more taxes.

Brown made his comments to a panel of lawmakers who are working on a spending plan — the first time in nearly 50 years that a sitting governor has testified before the Legislature.

“I want to make one thing clear,” Brown said. “… If we don’t get the tax extensions, I am not going to sign a budget [unless it is] an all-cuts budget.”

Brown, a Democrat, has said he does not want to borrow to close the gap or employ the kinds of bookkeeping gimmicks used to balance the budget in recent years. He has alluded to “dire consequences” if his plan to extend billions in income, sales and vehicle taxes is not taken to voters and ratified this year.

As a cold rain fell outside the Capitol, Sen. Mark Leno (D-San Francisco), a budget panelist, said failure to have the taxes extended would “make today’s weather look like a sunny day in July.”

The governor needs some Republican support to place the tax issue before the public. But many GOP lawmakers have said they want to see state regulations eased and public pensions revamped before even considering the tax proposal.

They received a boost Thursday from the bipartisan Little Hoover Commission, a watchdog agency, which urged legislators to freeze pension benefits for current government workers. The commission also proposed capping future pensions and raising the retirement age for some state employees. The report, embraced by Republicans and critics of California’s public retirement system, could become a blueprint for a GOP-backed pension proposal.

But a spokeswoman for the Service Employees International Union called the proposal “fundamentally unfair to workers and unwarranted by the facts.”

For the first time Thursday, Brown seemed ready to include discussion of pension changes as part of the budget negotiations. He sparred with Assemblywoman Diane Harkey (R-Dana Point), asking if she would support the tax package if it were coupled with a plan to curb pensions.

“If that’s serious, let’s do it,” Brown said.

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