Schwarzenegger Wants Budget Finished, but Deal Remains Elusive

By: Don Thompson AP
By: Don Thompson AP

Gov. Arnold Schwarzenegger on Thursday said the state budget stalemate is delaying work on pressing policy issues such as health care reform but is at a loss about how to end it.

The state Senate failed a second time late Wednesday to pass the $145 billion spending plan approved last month by the Assembly, falling one vote short of the two-thirds majority required to pass it.

Schwarzenegger and Democratic leaders say they are mystified about what it will take to persuade at least one more Republican to support it. Speaking Thursday to reporters, the governor described a frustrating negotiation process in which Senate Republicans keep raising new issues, even after he has assured them their previous concerns will be addressed.

The state's ongoing budget deficit, use of state environmental laws, how transportation bond money will be spent and tax credits for corporations are among the many issues Republican senators have

"We worked through many of those issues, but obviously it wasn't enough," the governor said during a Capitol news conference. "So I don't really know now what it takes to close it, so I hope they know."

He said some of those matters should be dealt with after a budget is signed because they are not directly related to the state's annual spending plan.

The budget is more than 6½ weeks overdue. With the fiscal year more than a month old, colleges, special education programs and some social service groups that rely on state funding are not receiving checks.

Schwarzenegger said it was important to break the deadlock so no
programs would suffer and lawmakers can start addressing other major issues on this year's agenda. Those include health care reform, legislative redistricting and negotiations over a water initiative to build reservoirs and canals.

"There's a lot on the plate, so let's not cut off those things because of the budget," he said.

He urged senators to keep working and not wait until the Assembly returns Aug. 20 from its summer recess.

Waiting until then would push California close to its recent record for a tardy budget. Only twice during the last 30 years has the budget been delayed past mid-August. The recent record was in 2003, when the Legislature passed the budget on Aug. 31.

The Senate came within one vote of ending the impasse Wednesday
night after Republican Sen. Abel Maldonado of Santa Maria defied his party and voted with Democrats to support it.

At least two of the Senate's 15 Republican members must support
the budget to reach the required two-thirds majority. On Thursday,
no other Republican appeared eager to join Maldonado.

The Senate also failed to pass the budget on July 21, one day after it was approved by the Assembly with bipartisan support.

Senate President Pro Tem Don Perata, D-Oakland, said it was the Republicans' responsibility to decide how to end the stalemate and
come up with the additional vote to approve the budget. He dismissed the 40-member chamber and was back in his eastern San Francisco Bay area district on Thursday.

Perata has said Democrats have compromised enough and are not willing to make further budget cuts. Schwarzenegger has said he is willing to cut programs through use of the line-item veto to meet Republican demands that the state's deficit be reduced from $700
million to zero.

Republican Minority Leader Dick Ackerman, R-Tustin, criticized Perata for sending senators home, saying many issues remain to be worked out.

"It's very difficult to negotiate when you're negotiating with ourselves," he told reporters Thursday. "We've made it pretty clear from the beginning what some of our basic needs were; the Democrats have known that for a long, long time. We're not there yet."

He also responded to Schwarzenegger's comments and said Republicans have not shifted their demands during negotiations.

"He asked what our concerns were, and they're basically the same ones that have been (there) for a number of months. He acknowledged that," Ackerman said.

The two-thirds majority required to pass a state spending plan gives the Republican minority leverage during budget negotiations that it lacks the rest of the year.

It is using that to try win concessions on several other issues. In addition to eliminating the deficit, Republicans are seeking changes on other issues that are not directly related to the budget process.

For example, they want assurances that billions of dollars in transportation bond money approved last year by voters will be spent as intended in the ballot measure. They also are trying to rein in efforts by Attorney General Jerry Brown, who has been pressuring local governments to address the negative effects on global warming of their various development projects.

Republicans fear Brown's actions hold the potential to delay or stop housing and road projects.

Schwarzenegger said he was willing to address that issue later but told reporters, "It shouldn't be part of the budget."

Without a signed budget, the state controller's office said it could not pay $326.6 million to community colleges; $170 million to school districts for programs such as special education and summer school; $140 million to companies that sell products to the state; and $300 million to preschool and day care programs.

Controller John Chiang said he will be unable to pay $2.1 billion due in August unless there is a budget agreement by the end of the month.

(Copyright 2007 by The Associated Press. All Rights Reserved.)

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