The sensible way to close California’s budget deficit is by mixing budget cuts with revenue increases, Assembly Speaker Fabian Nunez told the Sacramento Press Club Tuesday.

That’s the way the state’s former governor, Republican Pete Wilson, handled a previous budget crisis, said Nunez, a Democrat.

“Fifty percent was revenues, 50% was cuts. I think that’s a fair compromise,” he said.

Nunez said the Assembly has already held 22 hearings on mid-year cuts Gov. Arnold Schwarzenegger proposed in the face of a $14.5 billion deficit next year.

“I feel pretty confident that we are very close to reaching an agreement we could live with, if only we could find a way to convince Republicans they could live with it as well,” the speaker said.

GOP lawmakers have been adamantly opposed to tax increases. Democrats have a 48-to-32 majority in the Assembly, but budget bills require two-thirds approval, or 53 votes.

The state needs to take a far-reaching look at its tax and revenue structure, according to Nunez. He said it should include discussion of a split roll for property taxes, which currently treat big businesses and wealthy owners of vacation homes the same as lower-income homeowners, as well as other non-tax revenue options, suggesting a revival of faded discussions on how to get more cash out of the state lottery.

“Everything needs to be looked at,” Nunez said. “I think the last resort should be raising people’s taxes.”

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.