Budget meeting blows up
By Kevin Yamamura

kyamamura@sacbee.com

Published: Thursday, Dec. 11, 2008

Senate Republican Leader Dave Cogdill declared legislative negotiations with Gov. Arnold Schwarzenegger essentially dead after an apparently hostile meeting Thursday in the governor's office.

The Republican governor and legislative leaders publicly blamed one another this week for their failure to resolve a $14.8 billion gap in the current $100 billion state general fund budget. Cogdill, of Modesto, said leaks from "Big 5" meetings between four legislative leaders and the governor have undermined future talks.

Cogdill said he would attend future meetings with Schwarzenegger "out of respect for him and out of respect for his office." But he said he believes any deal will now be brokered among the legislative leaders and without Schwarzenegger.

"I believe that the Big 5 process has been irreparably compromised as a result of comments in the press over the last couple of days, and it's pretty difficult to negotiate in good faith in that situation," Cogdill said. "My personal belief is that any resolution to this that is going to be negotiated will result from efforts with the Big 4 similar to what we were able to accomplish with the budget last year, because, again, I just don't see this process as being productive or helpful."

Schwarzenegger and fiscal leaders have warned that without swift budget action the state will run out of cash in February. The governor has proposed immediate solutions that include tax hikes and spending cuts, a proposal that Democrats say they are willing to entertain but Republicans have lambasted because of its tax increases.

The governor openly criticized Republicans on Wednesday, saying they lack specificity in their budget demands and been ill-prepared during past "Big 5" meetings.

"The frictions are old and they don't seem to be getting any better," Cogdill said. "I would certainly admit that. I think the governor would agree with that. We have very different beliefs on how we need to move forward to solve this problem and how we need to treat the California taxpayer."

Department of Finance Director Mike Genest on Thursday estimated the budget gap at $41.8 billion through June 2010, which includes a $2 billion reserve. Even with the immediate solutions, the state would face an estimated $745 million cash shortfall in March.

Democratic Assembly Speaker Karen Bass and Senate President Pro Tem Darrell Steinberg said they remain hopeful they can reach a deal by the end of next week. Bass, D-Los Angeles, said she will do whatever she needs to do, including a lockdown of the Legislature if necessary.

"We might need to exert a little pressure if we need to hold folks in for a little while and let them come to their senses and let them recognize there are many long-term solutions we need to put in place," Bass said.

Bass and Steinberg, D-Sacramento, said it would be inappropriate to comment on the nature of Thursday's talks, though Steinberg seemed to acknowledge the tone was harsh.

"There was no lunch served," Steinberg said.

Assembly Republican Leader Mike Villines, of Clovis, participated by phone from Washington, where he was traveling for what he described as business meetings and a personal engagement.

http://www.sacbee.com/1095/story/1467174.html