Schwarzenegger to Veto Bills Until Budget Passes

By: Juliet Williams AP
By: Juliet Williams AP

SACRAMENTO (AP) - A frustrated Gov. Arnold Schwarzenegger turned up the pressure on lawmakers Wednesday, saying he will veto all bills sent to him until they pass a state budget.

The governor called a mid-afternoon news conference to express his dismay that Democratic and Republican lawmakers have not yet compromised on a spending plan. They remain at odds over how to
close the state's $15.2 billion deficit.

California is the only state with a fiscal year beginning July 1 that remains without a budget.

Schwarzenegger has warned that California faces a crash crisis and told reporters on Wednesday that passing a budget is the only issue the Legislature should focus on.

"Nothing in this building is more important than a responsible budget and to fix our broken budget system," he said. "We do not have the luxury of stretching out this process any longer."

Last week, Schwarzenegger signed an executive order eliminating more than 10,000 temporary, part-time and contract positions and cutting pay for thousands of state workers to minimum wage.

His order is being challenged by the state controller and California's largest state employees union but illustrates the level of tension in Sacramento over the lack of a budget compromise.

The administration has warned that California will have to start borrowing money in September to pay its bills. The dysfunctional credit market will force the state to pay hundreds of millions of dollars in fees and interest for those loans, administration officials have said.

State Controller John Chiang disagrees. His office issued a statement Wednesday saying California's revenue flow actually improved in July and that the state has enough money to make its payments until sometime in October.

Nevertheless, Schwarzenegger is seeking to force lawmakers into intense negotiations by creating consequences for inaction - both to state employees and now to lawmakers who want their legislation signed into law.

"We can solve this literally in one night," the governor said at the news conference. "As soon as there are consequences, people will sit down and not leave the table."

(Copyright 2008 by The Associated Press. All Rights Reserved.)

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