After being pummeled for weeks by Gov. Arnold Schwarzenegger's campaign as a Democrat who would raise billions in taxes, state Treasurer Phil Angelides released Wednesday an ambitious economic agenda, vowing to balance the long-term state budget and cut taxes to "ease the burden on the middle class."
Angelides, the Democratic candidate for governor, unveiled his 11-page plan called "Renewing the Promise of California" in Los Angeles and San Francisco with Democratic U.S. Sen. Dianne Feinstein at his side.
Standing before a podium and large banner that declared "The Angelides Middle Class Tax Cut," the Democrat said he would cut taxes for 4.5 million middle-class families and seniors in California.
"We can't afford four more years of Bush-Schwarzenegger economics," Angelides said. "I'm running to put this state back on the side of hard-working people, to challenge the special interest status quo."
Meanwhile, Gov. Arnold Schwarzenegger held a news conference in Sacramento to highlight his opposition to tax increases and criticize Angelides' proposal to raise the state income tax rate on California's top taxpayers.
"We trust the people with the money," the Republican governor said, flanked by small business and anti-tax advocates. "They (Angelides' campaign) trust the government to spend the money. We want to expand the economy, they want to expand government.
"I've said it before and I will say it again, I will not raise taxes on the people of California -- period," Schwarzenegger said.
Asked about Angelides' plan to cut taxes for middle-class families, the governor said the state's fiscal picture had not brightened enough.
"I think what is important is that we stimulate the economy so that the people can benefit from that," the governor said. "I think we still have a debt to pay off."
The governor's campaign has hammered Angelides' plan, offered during the Democratic primary, to raise the top income tax rate and use the estimated $3.1 billion to pay for public education improvements.
On Wednesday, Angelides' campaign said the tax increase would affect 1 percent of the wealthiest Californians, and "it will cost a couple earning $1 million a year about the price of two caffe lattes a day."
Angelides, in San Francisco, argued that Schwarzenegger has offered little more than "a trail of broken promises and an agenda that is little more than a special interest shopping list."
"He has no plan to reduce the middle class tax burden; no plan to improve education; no plan to expand health care," Angelides said. "Maybe he ought to change his name to Gov. Schwarzenothing."
The treasurer made his case with a rousing address before several hundred supporters in the colorful warehouse of Jeremiah Pick's Coffee, a Bayview business, where -- surrounded by the aromas of roasting beans and industrial machinery -- he aimed to cast himself as a champion of working-class families.
Angelides' middle-class tax cut, as well as plans to reduce college tuition and expand health insurance, were hailed by party faithful Wednesday as an energizing shot to the treasurer's campaign.
"Phil has defied the odds before, and he's going to do it again," Feinstein told the crowd to cheers. Calling Angelides "a son of California's middle class values," Feinstein lauded the treasurer for his depth of experience, knowledge of state finances and the vision to produce "a bold plan that's going to turn around this state's priorities."
The Angelides plan calls for providing families with a refundable credit equivalent to 15 percent of the federal earned income tax credit -- which the campaign estimated would mean $660 in tax relief for families earning up to $46,000 annually. The average return, campaign officials said, would be about $250 for the 2.5 million families who qualify.
The plan also calls for helping families with children by boosting the dependent tax credit to $483 per child, up $200 for those earning up to $100,000 annually -- an estimated 1.5 million families.
Angelides said his tax cuts would cost the state budget an estimated $788 million a year.
In addition, Angelides proposed $88 million in tax relief for seniors and the disabled and a $526 million tax cut for small business.
Angelides also proposed raising the minimum wage and indexing it to inflation, rolling back the cost of a four-year degree at the University of California by $5,000 and the California state universities by nearly $2,000. Those were fee levels prior to Schwarzenegger's tenure in office, he said.
The Democratic candidate also proposed to "require corporations with more than 200 employees to offer health insurance to their workers." But there, as with many other proposals, Angelides did not provide details.
A similar health insurance proposal, which came before voters as Proposition 72 in 2004, was rejected 51 percent to 49 percent.
Stephen Levy, an economist with the Center for the Continuing Study of the California Economy, said of Angelides' proposals: "This is an investment agenda. And I think California needs to invest in its people and its infrastructure and communities to be competitive. ... Investing more than we are investing now is good for the economy."
But Levy acknowledged the debate will focus on "the question of who should pay for these ongoing investments."
"In the country, not just in the state -- and it's not about Arnold -- we've been asking future generations to pay," Levy said. "Asking present generations to pay is a pretty good move."
