Calif. Democrats propose nearly $5B in new taxes

SACRAMENTO — Democrats in the state Senate are countering Gov. Arnold Schwarzenegger's proposed budget cuts with a plan to raise taxes by nearly $5 billion.

During a Senate subcommittee hearing Monday, Democrats said they want to delay the start of corporate tax credits by two years. Their plan also would extend by two years the temporary increases in the income tax and vehicle license fee that were approved last year.

Democrats also propose raising the tax on alcohol but would allow a temporary 1 cent increase in the state sales tax to expire at the end of the year.

Schwarzenegger proposed no tax increases in his latest plan to close California's projected $19 billion budget deficit, relying mostly on spending cuts.

Copyright 2010 The Associated Press.