Republican Legislators Blocking Agreement on New Budget

Legislative leaders emerged Saturday evening from nearly seven straight hours of backroom budget negotiations with Gov. Arnold Schwarzenegger to announce that they once again were unable to reach a final agreement.

As the state moves into the third day of the new fiscal year without a spending plan in place, Republican lawmakers continue to block a budget proposed by Democrats that differs little from the governor’s own draft.

But Republicans say the state cannot afford the roughly $1 billion in additional spending that is in the Democrats’ $116.6-billion plan. The governor and legislative leaders will return to the negotiating table today in the hope of reaching a final deal.

“We’re just confused,” said Senate President Pro Tem Don Perata (D-Oakland). “We’ve put everything on the table we can put on the table.... We’re stuck.”

Senate Republican Leader Dick Ackerman of Irvine said the Democratic plan included ongoing programs the state could not afford and would lead to a projected $5.5-billion shortfall by next year.

He said that projected shortfall needed to be reduced more than a third before Republicans would sign off on a spending plan. “That is our starting point,” Ackerman said.

He said the governor played the role of mediator in the talks and that Republican legislators were the driving force behind holding out for more reductions.

Late Saturday, while working out at a 24-Hour Fitness club in Sacramento with his wife and children, the governor told a reporter that the two sides were very close to a final agreement.

He dismissed any suggestion that the deal was linked to a compromise on the November special election. There had been speculation that Schwarzenegger might want to negotiate an overall agreement on the budget and ballot measures that the two parties could jointly support in the election. Schwarzenegger said the two issues would be negotiated separately.

Meanwhile, Democrats said the GOP holdout was unreasonable. The governor’s plan, they said, would leave a deficit just as big as the Democratic plan, because it includes more than $1 billion in proposed cuts that budget analysts say are unconstitutional or would be blocked by binding labor contracts.

Assembly Speaker Fabian Nunez (D-Los Angeles) said he hoped to close a deal today so it could be brought up for a vote in the Legislature early this week.

“Hopefully, there will be a little more action,” he said. “We’ll certainly see very shortly whether Republicans want a budget.”