With budget talks trudging along, Gov. Arnold Schwarzenegger's aides are preparing a January budget plan that attempts to bridge California's entire $40 billion gap by June 2010.
The Republican governor and Democratic leaders had hoped to agree on a midyear budget solution to wipe away $18 billion of the general-fund deficit before Schwarzenegger's annual spending plan release, but they have made little progress since their last in-person meeting a week ago.
Schwarzenegger spokesman Aaron McLear said Friday that Democrats were "moving closer" to the governor's demands for deeper spending cuts and an economic stimulus package, but reported Monday that the leaders are still "far away" from a deal.
Schwarzenegger rejected a plan approved by Democrats before Christmas and has called for additional waivers of state regulations to encourage more public works construction next year. Leaders hope to enact a midyear solution to avoid running out of cash as soon as February.
Without an immediate solution, the governor will introduce a budget next week containing the largest 18-month deficit he has faced out of the six January spending plans he has proposed.
Schwarzenegger is required to propose a balanced spending proposal each year by Jan. 10, and he will release his 2009-10 budget next week. If lawmakers can reach a deal with the governor by then, the governor would trim his plan and propose solutions for a $22 billion problem.
"The Legislature has failed to provide a solution at this point, so we can't assume that a solution will be passed between now and the time we introduce the budget," McLear said. "We'll have the ability to revise any proposal if the Legislature comes up with a solution to the current year shortfall."
Schwarzenegger gave a preview of sorts when he introduced a budget in November that attempted to tackle what was then considered a $24.2 billion problem. That plan included a temporary 1.5-cent sales tax increase and new levies on sporting events, alcohol and some services, such as furniture repair.
The governor this month unilaterally implemented part of that proposal by signing an executive order calling for twice-monthly furloughs for state workers starting in February. He wants to reduce personnel costs by 10 percent, possibly through layoffs of the least senior workers.
The governor likely will pursue further cuts in state worker pay by eliminating two state holidays and holiday overtime pay.
Senate President Pro Tem Darrell Steinberg, D-Sacramento, and Assembly Speaker Karen Bass, D-Los Angeles, continue to speak by phone with the governor. Schwarzenegger remains at his vacation home in Idaho, where he has a private videoconference link.
Steinberg spoke twice Sunday to Schwarzenegger, according to Steinberg spokeswoman Alicia Trost.
Call Kevin Yamamura, Bee Capitol Bureau, (916) 326-5548.
About Comments
Reader comments on Sacbee.com are the opinions of the writer, not The Sacramento Bee. If you see an objectionable comment, click the "report abuse" button below it. We will delete comments containing inappropriate links, obscenities, hate speech, and personal attacks. Flagrant or repeat violators will be banned. See more about comments here.