Governor, Democrats still at odds; GOP left out of budget talks
By Don Thompson
The Associated Press
Saturday, December 27, 2008


SACRAMENTO Hopes by Gov. Arnold Schwarzenegger and Democratic lawmakers that they would strike a budget deal by weeks end fizzled Friday, with both sides saying theyll try again next week.

They are trying to agree on the details of a tax-and-cut package worth $18 billion that is needed to close a growing gap between state spending and revenue.

Republican lawmakers have been left out of the discussions because they refuse to sign on to any deal that includes a tax increase. Democrats and Schwarzenegger say the size of the deficit is so large that spending cuts alone will not be enough.

Californias deficit is projected to hit $42 billion over the next 18 months.

Senate leader Darrell Steinberg, D-Sacramento, and Assembly Speaker Karen Bass, D-Los Angeles, were in the Capitol on Friday, where they met for about two hours via videoconference with Schwarzenegger, who is vacationing in Idaho.

Both said talks were going well but declined to specify which details are keeping them from reaching a final agreement with Schwarzenegger, who wants additional steps to stimulate Californias economy. He also wants more concessions from state employees, including eliminating two of their 14 paid holidays.

The areas of negotiation have significantly narrowed, Steinberg told reporters after emerging from the governors office. Its time now to close the negotiations to go into this new year with the wind at our back.

The governor isnt yet satisfied that the legislation does enough to create more public-private partnerships on infrastructure projects, speed the projects construction and ease environmental regulations, Schwarzenegger spokesman Aaron McLear said.

He continues to push for deeper cuts and an economic stimulus package that creates jobs, McLear said. You cant make these cuts and raise revenues to this magnitude without creating jobs to balance the effects of those cuts and revenues.

He said its the same outline Schwarzenegger has given to lawmakers several times since November.

They know exactly where he stands, what he needs to support this, McLear said. Were not there yet, but were making progress.

Steinberg said Democrats have met the Republican governor more than halfway on his economic stimulus requirements.

Bass said Democrats continue insisting that any concessions by state employees be negotiated through employee unions.

Steinberg and Bass said they were likely to meet with Schwarzenegger on Monday and hoped to bring a revised budget package to a vote by the end of next week.

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