Jerry Brown ends talks on bipartisan budget deal

Reporting from Sacramento -- Gov. Jerry Brown has abandoned his effort to negotiate a bipartisan budget, charging that Republicans were unwilling to support his plan unless he yielded to “an ever-changing list of collateral demands.”

The governor’s announcement that he is walking away from the negotiating table, made in a late-afternoon news release Tuesday, further roils the state’s finances and marks the biggest setback yet for the 72-year-old Brown. He returned to Sacramento this year for his third term as governor promising that he had the political skills and policy expertise to resolve the state’s chronic financial mess.

Earlier in the day, key GOP lawmakers who had been negotiating with the governor declared the talks fruitless.

“We gave it our best. We’re very disappointed. It’s done,” said Sen. Bill Emmerson (R-Hemet).

Budget cuts that lawmakers approved earlier this month closed only $11.2 billion of the estimated $26-billion deficit. Brown wanted to address most of the rest of the gap with a special election in June, when he hoped that voters would agree to continue paying temporary increases in taxes on income, sales and vehicles. All will have expired by July 1; higher income taxes already have stopped.

The governor needed at least four GOP votes to get a tax measure on a June ballot. On Tuesday, he said he was giving up his quest for those votes.

“Each and every Republican legislator I’ve spoken to believes that voters should not have this right to vote unless I agree to an ever-changing list of collateral demands,” his statement said.

Administration officials and legislative leaders declined to say how they intend to proceed. Among the options they could pursue to raise revenue are gathering signatures for a citizens’ initiative on the tax plan, or attempting to use an untested legal loophole to put the measure on the ballot with a simple majority of the Legislature, which Democrats command.

But time is running short. The deadline for balancing the budget is in June, and legislative leaders acknowledged Tuesday that they would be unable to place a measure before voters by then. California’s treasurer has warned that the state would face a serious cash crunch if resolution of the budget problem was pushed into the fall, possibly forcing officials once again to issue IOUs.

Brown lashed out at GOP lawmakers Tuesday for blocking a June election, the linchpin of his budget plan. He cited a demand that he keep rather than jettison, as his budget proposed, a tax break given to California companies that move jobs out of state.

“Republicans demand that out-of-state corporations that keep jobs out of California be given a billion-dollar tax break that will come from our schoolchildren, public safety and our universities. This I am not willing to do,” he said in his statement.

The tax break was one of dozens of demands that Republicans delivered to Brown on Friday in a seven-page document that outlined their price for supporting his plan. It was one of several major points of disagreement that Emmerson said could not be overcome.

Another was how to cap state spending. A third was how long voters would be asked to renew the billions of dollars in taxes. Brown wanted five years of extended taxes; Republicans wanted no more than three.

Emmerson called Brown a “very honorable adversary” in negotiations but said the divide between them could not be bridged, even though much progress had been made on changes to state regulations and public pensions.

Last weekend, a group of Senate Republicans negotiating with the Brown administration narrowed from five to three — with Sens. Anthony Cannella (R-Ceres) and Tom Berryhill (R-Modesto) joining Emmerson in the latest round of negotiations.

Cannella blamed the collapse of talks on special-interest pressure on Democrats not to make concessions.

“Finding agreement required an equal willingness from the public-employee unions, trial attorneys and other stakeholders to join our effort to get California moving again — a willingness that was stunningly absent from our conversations,” Cannella said in a statement.

Republicans were also under pressure. Only a few were willing to engage openly in talks about any deal that included Brown’s tax plan. On Tuesday, an anti-tax group launched a radio ad in Cannella’s and Berryhill’s districts, urging them not to go along with any spending proposal that relied on taxes.

“We must hold our legislators accountable,” the ad states. “They are the only thing standing between us and a new, huge tax increase.”

By Tuesday evening, Democrats declared Republicans “irrelevant” and signaled plans to move ahead without the GOP.

“They appear to want to be irrelevant and seem intent on achieving that objective,” Senate President Pro Tem Darrell Steinberg (D-Sacramento) said in a hallway news conference.

Steinberg declined to explain how legislative leaders and the governor planned to go forward except to say, “We will use the power of our majority.”

He said if there were to be an election, it would not take place until after June. If Brown decides to pursue a citizens’ initiative for the fall, he could choose to put different taxes before the public. Polls have shown voters are far less willing to levy new taxes than keep existing ones.

On Tuesday evening, Brown released a YouTube message to voters. In it, he struck an optimistic tone rather than reiterate earlier threats that without public support for taxes, he would balance the rest of the budget with more painful cuts. Already, programs for the poor, elderly and sick have been slashed. Universities, libraries and parks have been reduced.

“I’m not giving up,” Brown said in the video. “Look, the problem has taken a decade to build up. It’s very serious and it’s going to take some time before we finally solve it. I’m going to explore every possible avenue. There’s more than one way to get to the goal.... I’ve been around a long time. I know we can do it.”

shane.goldmacher@latimes.com

anthony.york@latimes.com