California public works projects totaling $5 billion are expected to begin grinding to a halt today after the Assembly balked at a Democratic plan to end the state's bitter budget standoff.

Democrats and Republicans split along party lines in rejecting a roughly $19 billion package of companion bills – one for $11.3 billion in tax hikes, the other for $7 billion in spending cuts.

Tuesday's vote represented a last-ditch attempt to discourage state officials from beginning to pull the plug on $5 billion in public works projects because the state is dangerously low on cash.

Schwarzenegger, state Treasurer Bill Lockyer and Controller John Chiang are scheduled to meet today to vote on shelving the badly needed projects at a rate of about $660 million monthly.

Thousands of layoffs could result from delaying construction of projects ranging from school buildings to highway improvements, Lockyer told legislators in a rare joint session last week.

As Lockyer explained, local and state public works projects are financed from the state's Pooled Money Investment Account, composed mainly of the state's general operating fund, special state funds and money deposited by cities and counties.

When building projects are proposed, the sponsoring entity borrows money from the fund, which is repaid when Lockyer's office sells bonds.

Because of the state's poor financial condition, however, there is no market for bonds. Without bond revenue, the investment account must hoard its current revenue to fuel the state's general fund so it can pay ongoing bills.

Partisan fighting has raged for weeks over whether to raise taxes in bridging a projected budget gap so severe – about $40 billion over 18 months – that the state expects to be unable to pay all its bills in February.

After budget measures failed initially Tuesday night, Speaker Karen Bass placed Assembly members on call, buying time for Democratic leaders to lobby or negotiate with Republican counterparts.

But the session ended without any progress.

"I'm very disappointed that Assembly Republicans have once again blocked a responsible plan to resolve the state's cash crisis, address a major part of the deficit, and allow badly needed transportation projects – and the jobs that go with them – to continue," Bass said in a statement.

She said she "had legimately hoped we could convince some Republicans to at long last compromise and support reasonable solutions."

"Clearly, they aren't interested," she said.

Legislation before the Assembly consisted of revenue increases previously proposed by Gov. Arnold Schwarzenegger and budget cuts previously proposed by Democrats.

The tax increases included a three-year, 1.5-cent sales tax increase, imposition of a 9.9 percent severance tax on oil produced in California and a nickel-a-drink increase in the alcohol tax.

Budget cuts before the Assembly included a $2.5 billion reduction to K-12 education, reductions in grants for low-income, elderly, blind or disabled individuals, and a $657 million reduction to state employee compensation, to be determined through collective bargaining with labor unions.

The Democrat-supported measures did not include numerous government-reform measures sought by the GOP, including a stiff state spending cap, a two-year budgeting cycle and proposals to alter labor and environmental rules in an effort to boost business and increase employment.

Fifty-four votes were needed to pass the two budget-related bills before the Assembly on Tuesday.

The measure targeting cuts died on an initial vote, 48-27, and the proposal to raise taxes failed 46-27.

No Democrat rejected the tax hikes, but five abstained from voting: Alyson Huber of El Dorado Hills, Joan Buchanan of Alamo, Manuel Perez of Coachella, Marty Block of San Diego and Charles Calderon of Whittier.

Only one Democrat, Mariko Yamada of Davis, voted against the bill proposing multibillion-dollar budget cuts, saying she could not support ending state subsidies for landowners who agree to limit use of their acreage for agricultural, scenic or open-space purposes.

"The agricultural community is also a vulnerable community," Yamada said of her opposition.

Democrats Huber and Calderon also abstained from voting on the budget cuts.

After it became clear the proposals would not pass, Democrats removed their votes so they would not appear on the official record.

Call Jim Sanders, Bee Capitol Bureau, (916) 326-5538.