This is shaping up as a make-or-break week not only on the long-stalled state budget but on other major issues, such as water bonds, that are tied to the Nov. 4 ballot.
Capitol factions remain far apart on fully closing a $15.2 billion budget deficit – especially over taxes – with Assembly and Senate Democrats somewhat divided and Gov. Arnold Schwarzenegger at odds with most fellow Republicans.
The remaining gap is about $6 billion, which could be covered by loans from transportation funds, local governments or banks, by a temporary one-cent sales tax hike that Schwarzenegger is touting, by borrowing against lottery profits, by income tax boosts that most Democrats favor, and/or by tax loophole closures.
Which approach is finally adopted will largely depend on the shape of a "budget reform" ballot measure. Were Democrats to back off on taxes, for instance, and shift to borrowing – which Schwarzenegger says he opposes – GOP lawmakers might soften demands for a hard cap on spending increases. The governor vows to reject any deal that doesn't include budget reform but is, as usual, flexible on details.
The rub is that any change in the constitution's budget provisions must go to voters, and the semiofficial deadline for the Nov. 4 ballot was last weekend. The Capitol's new assumption is that it could be stretched a week by shortening ministerial procedures for measures and still make what appears to be a semi-hard deadline of Sept. 5 for mailing ballots to soldiers and other overseas voters.
The ordinary flow of business, meanwhile, has been speeded up because Democrats still harbor hopes of ending the session by this weekend so they can attend next week's Obamaniacal Democratic convention in Denver. Some Democratic legislators are planning to split for the convention even if there is no budget agreement, saying they'd be just a 2 1/4-hour plane ride away.
And then there's water – another issue that Schwarzenegger wants to resolve along with the budget so that it, too, can go on the November ballot. He and Democratic Sen. Dianne Feinstein are pushing a $9.3 billion water bond that includes new reservoirs and dams that environmentalists and most other Democratic politicians oppose.
Pro-water development forces are clearly hoping that the state's current water travails – two dry years in a row and judicial decrees that limit water exports from the Sacramento-San Joaquin Delta – will propel action. The Assembly's Democrats appear poised only to offer a much-revised version of the Schwarzenegger-Feinstein plan that is unlikely to win approval but would give Democrats some political cover on the issue.
So will anything really happen this week on the budget and water? Chances are very slim on the former – a meeting between Schwarzenegger and legislative leaders Tuesday was brief and unproductive – and even less on the latter. We may be looking at more weeks of stalemate and a special election.
Call The Bee's Dan Walters, (916) 321-1195. Back columns, www.sacbee.com/walters.
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