California Gov. Gray Davis has proposed $20 billion in cuts and $8.3 billion in tax increases to close the state’s cavernous budget deficit. California’s shortfall—estimated at $35 billion over the next 18 months—is the nation’s largest ever, even in a year when a financial crisis is gripping states and cities across the nation. Davis, a Democrat, proposed cutting 1,900 jobs, raising the sales tax 1 cent on the dollar, hiking income tax rates on those making more than $136,000 a year, and raising the cigarette tax $1.10 per pack. Davis said only hard-core cuts would put the state back on “sound financial footing.” The state Senate’s ranking Republican, James Brulte, said raising taxes in a slow economy was like “putting leeches on a patient who is very sick.”
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