San Francisco mayor and California gubernatorial candidate Gavin Newsom expressed support for a constitutional convention and called for a reworking of the state's tax system at a North Hollywood forum Tuesday.

"It's the only way to turn the state around and change the governance of the state," he said, speaking at a meeting of the Valley Industry and Commerce Association.

Newsom criticized the state's dependence on sales taxes, calling it a regressive form of taxation. He suggested that a constitutional convention should revisit Propositions 13 and 98, the voter-approved constitutional amendments that cap property taxes at 1 percent and mandate levels of school funding.

Newsom said that he does not support overturning either proposition individually, but said they should be considered as part of a total overhaul.

"I think if you're going to do something about the state's fate and future, you've got to put everything on the table," he said.

He also questioned the state's policy of not placing a sales tax on services, asking why golf balls are taxed but not a round of golf.  Newsom also proposed increasing tobacco taxes and restoring vehicle registration fees to their pre-1998 level. He said that present governor Arnold Schwarzenegger's executive order reducing the fee to .65 percent of a car's value had cost the state $27 billion since 2003.

Newsom also said that he opposed increasing income taxes, saying that the state could not bear higher taxes, and proposed temporarily refunding payroll taxes out of the state budget as a stimulus measure.

He spoke favorably of the constitutional proposals put forward by the reform groups California Forward and the Bay Area Council, but said that he was not attached to any particular plan.

"I'm for whatever works," he said.

He added that any constitutional convention would need to address the budget process, and that the state should adopt a large rainy day fund, two-year budgeting, and pay as you go financing. He said that these reforms had allowed him to eliminate a $1 billion budget deficit during his time as mayor of San Francisco.Newsom also called for the state to abandon the requirement for two-thirds of the legislature to approve a budget.

"It takes a simple majority to take rights away from a protected class of people, but it takes two-thirds to pass a budget," he said, referring to Proposition 8, a recent ballot measure which ended the state's supreme-court-mandated recognition of gay marriage.

Newsom is trailing former California governor and opponent for the Democratic gubernatorial primary Jerry Brown by a significant margin, according to two polls reported in the San Francisco Chronicle last week.