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Davis Calls for Higher Taxes and Borrowing

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Governor Davis has released his revised budget calling for higher taxes on cars, tobacco and other products to reduce the state´s growing deficit. Davis says he has made tough choices to slash a deficit that has swelled to $38 billion since he released his initial budget in January.

His revised $96 billion budget plan calls for borrowing $10 billion to finance part of the debt. Davis´ plan also calls for raising more than $8 billion in taxes, including a hike in car fees and a half-cent sales tax increase.

The new proposal faces a fight in the Legislature where Republicans say they will not support any tax hikes. Even though Democrats rule both houses, the budget needs two-thirds approval to become law.

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