Schwarzenegger Suggests Raising Taxes

State employees will be paid in full for the month of August, and a local judge will hear challenges to Governor Schwarzenegger's order to drop their pay to the minimum wage until the legislature passes a budget. But the hearing won't be until next month after the full checks have already been issued. Meantime, the Governor proposed today what he called a "true compromise" between Democrats and Republicans, including a three-year, one-cent hike in the sales tax.