After 51-day stall, Senate OKs budget

Times Staff Writers

California’s 51-day budget impasse ended Tuesday when Senate Republicans who had been blocking a spending plan gave up their fight, accepting largely symbolic concessions on a few pet issues.

The $145-billion budget they approved is nearly identical to the bipartisan plan passed by the Assembly on July 20 and endorsed by Gov. Arnold Schwarzenegger. It would increase spending on schools, reduce aid to the elderly and disabled, raise student fees at state universities and delay Los Angeles-area mass transit projects.

More than $1 billion intended for public transportation work, such as widening some freeways and extending the Expo light-rail line, would instead be used to help reduce the multibillion-dollar deficit the state has been carrying for years.


Republicans long ago stated that their objective was to cut state spending, but the absence of significant reductions prompted many in the Capitol to question the point of disrupting state services.

Thousands of medical clinics, child-care facilities, nursing homes and other government contractors have been struggling to make do since payments from the state stopped last month. They will be paid retroactively, but the state will not reimburse interest charges on loans that contractors may have taken to tide them over.

“Thank God this is over with,” said Senate Leader Don Perata (D-Oakland). “We had a long holdout . . . and I don’t believe the institution is any better for it. It certainly wasn’t a moment of distinction for any of us.”

Senate Republicans expressed no regrets. They boasted of gains won at the bargaining table, including a temporary prohibition on lawsuits that invoke new global warming laws to stop development. The ban applies to suits aimed at transportation and levee projects authorized by voters last year.

Another concession that Democrats and Schwarzenegger granted the Republicans will allow railroads to access state subsidies for projects to reduce pollution.

“This is the first time in my seven-year legislative career that I’ve seen Republicans achieve so many of our budget priorities,” Senate Budget Committee Vice Chairman Dennis Hollingsworth (R-Murrieta) said.


Republicans stressed that their holdout enabled them to secure a promise from Schwarzenegger to use his line-item veto to cut $700 million more from the budget, which will help eliminate this year’s projected deficit. Lawmakers briefed on the additional cuts said privately that they would include a $300-million reduction in healthcare programs for the poor, as well as a drop of at least $50 million in the budgets of state agencies for administrative expenses and other costs.

Schwarzenegger made his promise weeks ago. The other concessions Republicans won are mostly minor policy adjustments that Democrats say they gladly would have signed off on long ago to get a budget passed.

“Here we are a month later,” said Assembly Speaker Fabian Nuñez (D-Los Angeles), “exactly in the same place where we were a month ago.”

Lydia Missaelides, who runs a nonprofit that represents facilities providing care to the elderly, said she was stunned to learn details of what was holding up the budget.

“We have people taking out second mortgages and laying off staff because of this,” said Missaelides, executive director of the California Assn. for Adult Day Services.

The budget passed a day after the Legislature reconvened after a summer recess. The two Republican votes needed for Senate approval came from Senate minority leader Dick Ackerman of Irvine and Sen. Abel Maldonado (R-Santa Maria), who had broken with his caucus earlier and cast his party’s lone vote for the budget the Assembly had passed.

No other Republicans voted for it.

In a brief written statement Tuesday, Schwarzenegger said he and legislators from both parties can now “move forward together on the issues we’ve been elected to address.”

The rebellion that resulted in the seven-week impasse had caught many in the Capitol off guard.

When lawmakers have deadlocked over the budget for an extended period in the past, the stalemate has typically been the result of a cash crunch and disputes over whether to hike taxes or cut deeply into government programs. This year, the Democrats proposed spending almost the exact amount the Republican governor wanted, and there were no tax increases on the table.

GOP political consultant Allan Hoffenblum said the holdout was essentially a tantrum by Republican legislators who are frustrated with a governor who has teamed with Democrats to pass bills the GOP opposes, such as the anti-global warming legislation Schwarzenegger signed last year.

“They wanted some attention,” he said.

The impasse brought most non-budget business at the Capitol to a standstill, and the governor has limited time to get his agenda back on track. Lawmakers are scheduled to adjourn for the year in a few weeks.

The bitterness lingering from the budget battle threatens to derail Schwarzenegger’s plans to bring healthcare to all Californians and overhaul the state’s aging water infrastructure this year.

“This ought to serve as a lesson that this ought never happen again in the state of California,” Nuñez said.

Nuñez has advocated changing the state Constitution to require a simple majority vote by the Legislature for budget approval rather than the current two-thirds super-majority. Such a change would allow the dominant party -- currently the Democrats -- to pass a spending plan without any minority support.

“I believe very strongly that the Republicans in the Senate tried to abuse” the two-thirds vote, Nuñez said.

As the impasse dragged into the summer, a frustrated Schwarzenegger said that he also might support such a change. The remark drew an angry rebuke from Republicans, whose relationship with the governor was already at its lowest point since he took office.

As budget negotiations repeatedly blew up, the governor’s annoyance with his fellow Republicans spilled into public view.

Last week, he took the unusual step of going into some of the holdouts’ districts to criticize their inaction.

Schwarzenegger is expected to sign the budget by the end of the week. Democrats said they have been assured that welfare is not on his list of planned cuts.

“I think that the governor will cut some things I don’t like,” Nuñez said, “but . . . most of those vetoes are not going to be a surprise to us.”

The budget will not include a moratorium that Republicans had sought on lawsuits filed against developers under the authority of the new global warming legislation.

Instead, they settled for limiting suits to projects funded with state bond money.

Environmentalists said the concession will have minimal impact.

“The language they settled on is quite limited,” said Karen Douglas, state legislative director for the nonprofit group Environmental Defense. “We don’t think it does damage.”


Times staff writers Jordan Rau, Michael Rothfeld and Nancy Vogel contributed to this report.


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Key budget points

Winners and losers in the $145-billion state spending plan:


Schools: No cuts; spending is increased to $57.2 billion.

Prisons: More than $500 million in new spending after court-ordered prison medical care is improved.

Privatization advocates: The state agency that backs student loans is privatized, creating nearly $1 billion in revenue.

Yacht owners: Forgives sales tax on newly purchased boats kept out of state for 90 days.


College students: State university fees rise as much as 10%.

Commuters: Nearly $1.3 billion in gasoline taxes is shifted from local transportation projects to the state general fund.

Low-income Californians: Cost-of-living increases for the elderly and disabled are delayed.


Source: Legislative Analyst’s Office