Posted on 07/01/2004 9:07:31 AM PDT by NormsRevenge
SACRAMENTO (AP) - California ended the fiscal year without a budget approved by the Legislature for the ninth time in 11 years and didn't even have a handshake budget deal between legislative leaders and Gov. Arnold Schwarzenegger. Schwarzenegger's staff closed the office about 9 p.m. Wednesday night - three hours before the new fiscal year began - even though the governor had been optimistic of a breakthrough on the few issues that still separate the parties, including local government financing, health and welfare spending and money for state universities.
"He said a lot of obstacles were cleared away today," said Margita Thompson, Schwarzenegger spokeswoman. "He said they are solving, solving, solving."
But even as the negotiators continued to express optimism that a deal is imminent, evidence of a potential rift between the GOP governor and members of his own party began to show.
After completing several deals with the Legislature's Democratic majority in recent days, Schwarzenegger faces growing uneasiness within his own ranks as he continues to back away from spending cuts he appeared committed to only a few weeks ago.
Republicans are making an issue of $200 million in fee increases the governor has included in his $103 billion budget, saying they believe the fees are no different than a tax increase.
"We've been saying for months that the fees are a top priority," said Assembly Minority Leader Kevin McCarthy of Bakersfield. "We laid that out very early."
So far, however, Schwarzenegger has kept the fees in his budget plan.
Some legislators and aides speaking on condition of anonymity said Schwarzenegger told McCarthy and Senate Republican leader Dick Ackerman of Irvine that he wouldn't remove the fees during a closed-door meeting Tuesday evening.
Both McCarthy and Ackerman dispute the account, saying that during the meeting they only made their arguments for removing the fees from the budget to Schwarzenegger again and the governor did not take a position.
"The fees are one of many issues still to be resolved," Ackerman said. "The Democrats want to keep them; we'd like them removed."
Rob Stutzman, Schwarzenegger's communications director, also said the governor never turned the Republican leaders down.
Republican unhappiness with the fees could hamper the governor's attempts to build the necessary two-thirds majority to pass a budget. Although Schwarzenegger promised during the recall campaign that he would slash spending and balance the state budget, the spending plan emerging from the last weeks of negotiations is filled with borrowing, one-time savings and accounting gimmicks.
In his latest agreement with Democrats, Schwarzenegger gave up efforts to trim the pension benefits of state workers and instead backed a convoluted plan that relies on new workers failing to enact their full retirement benefits to derive hoped-for savings of $2.7 billion over 20 years.
In another victory for Democrats, union officials say Schwarzenegger has also backed away form his demand that workers give back a 5 percent raise that is scheduled to begin July 1.
For many Republicans, the fees are a line in the sand.
"It is very important from our view," said Assemblyman Rick Keene, R-Chico, vice chair of the budget committee. "The problem as we see it is the state has a spending problem, not a revenue problem."
The governor's proposal includes a hike on loggers in exchange for easing regulations on cutting timber on some smaller tracts of land. Schwarzenegger has also proposed raising fees on water rights permits and fees on landowners in rural areas for fire protection. He also wants to take away state subsidies for booking fees cities pay for use of county jails.
The $200 million in fees add to a larger number that worries some Republican legislators, as several of Schwarzenegger's revenue projections have not materialized.
For example, he expected to save about $300 million this year by renegotiating the state contract with prison guards but said Tuesday the state would be getting about $108 million over two years. Schwarzenegger also expected to get about $450 million by renegotiating other employee contracts, which apparently now will not happen. There's also a settlement in a school funding lawsuit that may cost the state as much as $130 million this year.
On top of that, Democrats still want abut $400 million in additional spending to help state universities, home health care workers and welfare recipients.
All told, that adds $530 million in new spending while there is about $696 million in anticipated lower revenues.
Because the administration and Democratic negotiators are focusing on finding extra money to pay for the unanticipated costs and Democratic demands, sources close to the negotiations said, there appears to be little interest in digging the hole deeper by eliminating the fees.
Meanwhile, a bipartisan committee held a hearing Wednesday into the governor's compact with five Indian tribes with gambling casinos that is estimated to bring in at least $1 billion next year along with annual payments of between $150 million and $200 million.
The committee, which took no vote on the issue, passed the issue on to both houses, which are expected to vote on the proposal Thursday.
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CA: Cut pensions? It's a touchy prospect
What am I not getting here? What happened with all the hoopala that went with the budget getting approved before the deadline? I thought it was a done deal!
That's nice. So he gives the Democrats practically everything they want and they still won't deal. What else is new?
Pfft. Amateurs.
New York is 10 for 10 and counting!
Actually, New York hasd missed 20 consecutive deadlines 20!.
what is happening with the rating of CALIFORNIA bonds-any upgrades?
NY makes these people look like experts at meeting deadlines. When is the last time NY had a budget on time? 1824?
No surprise.
The longer the state government lacks the money to do anything, the better!
New York State has not had an on-time budget since 1984.
I was clearly being a little sarcastic
I'm not concerned about the budget being a little late, which in this state is hardly news. I'm concerned about how it INCREASES over last year (even if it does so without new taxes, so I suppose it could be even worse).
Any chance that Arnold has left himself free to line-item-veto some portions, at least, of the pork??
ping
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