ELECTIONS ’88 : Hart Raps Tax Plan; Ferguson Backs Governor

Gov. George Deukmejian’s decision to abandon his $800-million tax increase plan Friday was apparently prompted by pressure from fellow Republicans who feared that the controversy would make it tougher for them to portray Democrats as big spenders eager to raise taxes.

But Deukmejian’s plan was such a hot political potato that it even had Republicans sniping at one another.

Just hours before Deukmejian’s announcement, Newport Beach City Councilwoman Evelyn R. Hart was renouncing the governor’s proposal and challenging Assemblyman Gil Ferguson, a Newport Beach Republican, to do the same. Hart is running against Ferguson in the 70th Assembly District GOP primary, along with Laguna Beach environmentalist Michael Mang.

Issues Challenge

Hart issued her challenge Friday morning in a small conference room at Le Meridien hotel in Newport Beach at the same time that Deukmejian--in a nearby ballroom festooned with red, white and blue balloons--was stumping for Ferguson.

“I’m opposed to the governor’s proposal to raise taxes,” Hart said in an interview. “When is Gil Ferguson going to take a stand?”

But Ferguson, interviewed after the governor asked voters to return the two-term assemblyman to Sacramento to help the “Republican team,” declined to say whether he would vote for Deukmejian’s plan to raise taxes by $800 million to deal with an unexpected $2.3-billion shortfall in revenues over the next two years.

The governor’s plan would have raised $410 million by eliminating for one year a law protecting taxpayers from being bumped into higher brackets by inflation; $250 million by making the state business tax code conform to the federal law, and $140 million by suspending for one year a tax break that allows businesses to carry losses from one year to the next.

Ferguson said he hoped that Republican legislators would devise an alternative plan so he would not have to vote on Deukmejian’s tax proposal. Pressed to say what he would do if Deukmejian’s plan did come to a vote, Ferguson’s reply illustrated the kind of pressure Deukmejian has been getting from his own party loyalists.

Backs the Governor

“I don’t even want to answer that because I don’t want to say I’ll vote against the governor,” Ferguson said. “We are doing everything we can to keep that plan from coming to the point where we have to vote for it. I hope that we can get it changed before that time because I don’t ever want to predict that I would vote against the governor.”

Ferguson won’t have to. After Deukmejian left Orange County, he announced at a Los Angeles news conference that he was placing the burden for solving the budget shortfall on the Legislature. If the Legislature sends him a budget long on spending and short on revenue, he said, he will use his line-item veto to eliminate spending until the plan is balanced.

Hart, reached later Friday, termed Deukmejian’s decision “very interesting.”

“I think it is very appropriate that the governor withdraw the tax increase,” she said. “The sentiments I was expressing are felt throughout the Republican Party.”