Senate President Pro Tem Don Perata began Wednesday saying he had made enough concessions to secure a budget deal with the governor and called for Republicans to sign on.
But the day ended with little progress, as Perata concluded that negotiations remained at "impasse."
So goes the topsy-turvy world of California's budget standoff amid a $15.2 billion deficit.
"We're huddling now and trying to see what our next step will be," Perata told reporters Wednesday afternoon.
Hours earlier, Perata described a compromise with Gov. Arnold Schwarzenegger that would temporarily increase the state sales tax by 1 cent and restrain future state spending.
The spending restraints include a rainy-day fund and a spending cap, but not gubernatorial authority for midyear budget cuts if the economy nose-dives, the Oakland Democrat said.
Republican have long insisted on a spending cap as a part of any budget deal.
"The question continues to be, are there Republican votes for it?" Perata said of the new plan.
He stopped short of calling the compromise a tentative agreement absent evidence that the governor could secure enough GOP votes for passage.
"A Republican governor should have some sway over Republicans," he said.
By the end of the day, Perata's optimism clearly had been quashed.
In the five hours between Perata's two comments, it became clear that Republican leaders were not joining Perata's call for a vote. Neither were Assembly Democrats nor Schwarzenegger.
"I think we keep getting closer, but there are still issues to work out," said Aaron McLear, Schwarzenegger's spokesman. "We hope that the legislators have the same sense of urgency that we do. We need to get this done."
Assembly Speaker Karen Bass was not ready to end budget talks, spokesman Steve Maviglio said.
"We're continuing to negotiate on all the pieces of the puzzle," he said. "Until they all come together, it's premature to say what's in and what's out."
Key issues that remain unresolved include how long a temporary 1-cent sales tax hike would remain in place and, when it is dropped, whether it would temporarily or permanently fall below the state's existing base rate of 7.25 percent.
The issue of a spending cap also remained controversial Wednesday.
Assembly Republican leader Mike Villines disputed Perata's characterization of agreement on a spending cap.
Villines said that the Senate leader's notion of a spending cap does not mesh with that of the GOP, which wants a firm limit on state spending through a formula tied to growth in population and inflation.
While Perata's plan includes a rainy-day fund, to set revenue aside in boom years, it is not a hard spending cap and allows spending to grow at a rate faster than inflation and population growth, GOP officials said Wednesday.
"There is no spending cap," Villines said. "It'd be a phony cap, if anything. And I've seen it all. It's all for a rainy-day fund, which is a good start. But it's not a hard spending cap that would solve the problem. You can characterize it any way you want, but it is what it is."
Maviglio, Bass' spokesman, said Assembly Democrats have not agreed to the hard spending cap pushed by Republicans.
Lynda Gledhill, Perata's spokeswoman, agreed late Wednesday that the Senate leader's reference to spending cap differs from that of the GOP.
"Strengthening our rainy-day fund operates as a spending cap because the state would be setting aside money that otherwise could be spent," she said.
Schwarzenegger continues to meet with legislative leaders on an individual basis, McLear said.
The governor met privately with legislative leaders Wednesday morning before speaking at a water rally outside the Capitol during the noon hour. He later flew to Hollywood to kick off the 26th annual Border Governors' Conference, where he is hosting leaders from 10 states along the Mexico-U.S. border through Friday.
McLear said the governor scaled back his conference schedule due to the ongoing budget discord.
THE SEARCH FOR TWO REPUBLICAN VOTES
Gov. Arnold Schwarzenegger and Senate Democrats are working to finalize a budget deal but will have to secure at least two Republican votes in the chamber to pass a plan even if every Democrat signs on. These GOP lawmakers are the focus of efforts to nail down a spending package:
Pickoff target: Sen. Roy Ashburn, R-Bakersfield
Status: Termed out in 2010
Scouting report: Ashburn left the door open Wednesday to voting in favor of a compromise plan. He said the governor's sales tax plan - a temporary hike followed by a cut in future years - actually constitutes a tax reduction.
Last Saturday, Schwarzenegger reached out to Ashburn on the airwaves, appearing on the legislator's weekly radio show for the first time. In a chummy chat, the governor touted Ashburn as one of the "warriors there by my side."
Pickoff target: Sen. Jim Battin, R-Palm Desert.
Status: Termed out in 2008
Scouting report: Battin knows it never hurts to have Democrats and the governor knocking on your door for a vote. Not that it sounds like he'll be backing a budget with a tax hike this year.
"It's something I'll never support," he said.
Battin added that "the pickoff strategy is an unfortunate one," and also called it premature. He said the best indicator of future behavior is past action - and he has never supported tax increases.
- Shane Goldmacher, Bee Capitol Bureau
Call Jim Sanders, Bee Capitol Bureau, (916) 326-5538.
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