(05-25) 04:00 PDT Sacramento --

Senate Democrats unveiled a plan Monday to raise $4.9 billion in taxes and other revenues in an effort to forestall the deep cuts to some services and the outright elimination of California's welfare program that are part of Gov. Arnold Schwarzenegger's budget proposal.

The plan would delay yet-to-be implemented corporate tax cuts, extend a personal income tax surcharge and extend a reduced tax credit for dependents. It also would raise the vehicle license fee to 1.5 percent, an increase of 0.35 percentage points, and increase taxes on alcohol.

Sen. Denise Moreno Ducheny, D-San Diego, is chairwoman of the Senate Budget Committee and said the proposal takes a balanced approach that does not put the burden of the deficit only on the poor.

"The point of it right now is to get people thinking, 'How do we do this in a fair way and how do we think of the economy as a whole?' " said Ducheny, who noted that the state would lose billions in federal dollars, and child care businesses across the state would close, under the governor's plan.

Earlier in the year, state Senate President Pro Tem Darrell Steinberg, D-Sacramento, had said new taxes would not be part of the Democrats' solution to the now-$19 billion deficit, although Steinberg had also said he believed the deficit would be significantly smaller.

Nathan Barankin, spokesman for Steinberg, said the Republican governor's proposal has forced Democrats to seek revenues to save social services.

"When the governor was given four months to do the absolute best he could to bring the budget into balance without any revenues, he ended up making California one of the worst states in the country in public education funding, making California the only state in the country without a welfare-to-work program and eliminating child care for tens of thousands of working people up and down the state," Barankin said.

Assembly plan today

Assembly Democrats will unveil their own plan at the Capitol today and it likely will have additional proposals to raise revenues. The proposals are in line with recommendations by the Legislative Analyst's Office that state leaders raise revenues in addition to making cuts.

Republicans in the Legislature and Schwarzenegger have said they will not support any additional taxes and have said the governor's proposal has painful but necessary cuts. The tax plan would require approval of two-thirds of the Legislature, which means it needs some Republican support.

Schwarzenegger called the proposal "disturbing," adding, "Whenever we have a problem, the only answer they have is tax increases rather than looking within, looking at the pensions, where we can save hundreds of millions of dollars, looking at the way the prison system is run where we can save billions of dollars - all of this money could go to education, could go to children, could go to vulnerable citizens."

The governor has said pension and budget reform are necessary for him to sign a spending plan this year, which could mean a very long debate that could continue well beyond the Legislature's June 15 deadline to pass a budget. Overhauling state employee pensions would not save the state money in the current budget.

Republicans roadblock

Senate Republicans pledged to block the tax plan from being enacted.

"Despite the Democrat tax increases proposed ... today, my Republican colleagues and I remain committed to protecting the pocketbooks of every Californian by solving this budget crisis without raising taxes," said Sen. Robert Dutton, R-Rancho Cucamonga (San Bernardino County).

Of the $4.9 billion package, just over $2 billion comes from suspending or delaying certain corporate tax cuts that have yet to take effect. Lawmakers also are reviving the so-called Amazon tax to require out-of-state businesses to collect taxes on purchases made by Californians.

Much of that portion of the plan was part of Schwarzenegger's original budget proposal in January. At the time he planned to suspend the tax breaks if the state received significantly fewer federal dollars than the he had hoped for. But, despite receiving fewer federal dollars, the governor included the corporate tax breaks in his revised spending plan earlier this month.

The tax plan also would extend for two years a 0.25 percent income tax surcharge that was part of last year's budget solution and continue the reduction of the dependent tax credit from $309 to $99 per dependent for two years. That amounts to about $1.4 billion this year and $4.2 billion next year.

Vehicle license fee

The vehicle license fee, which currently is at 1.15 percent, would be increased to 1.5 percent for two years, which would bring in about $1.2 billion for the budget. The fee historically was 2 percent, although it was reduced significantly first by the Legislature in the flush late 1990s and early 2000s and then by Schwarzenegger when he became governor.

The alcohol tax, which has not been increased since 1991, would bring in an extra $210 million and add 1 to 2 cents to the cost of a drink.

A temporary 1 percent increase in the state sales tax, approved last year as part of the budget, would not be extended.

Organizations that advocate for health and human service programs applauded the move.

Michael Herald, a spokesman for the Western Center on Law and Poverty, described the plan as a push to "repeal corporate tax loopholes and bring in revenues that prevent devastating cuts to children, preserve thousands of jobs and marks the beginning of serious budget discussions."

E-mail Wyatt Buchanan at wbuchanan@sfchronicle.com.

This article appeared on page A - 1 of the San Francisco Chronicle