February 17, 2009 in City

California one vote shy of reaching deal on budget

Judy Lin Associated Press
Associated Press photo

State Senate President Pro Tem Darrell Steinberg, D-Sacramento, left, talks with Democratic state Senators Christine Keough, of San Diego, second from left, Gloria Romero, of Los Angeles, Ellen Corbett, of San Leandro and Denise Ducheny, of San Diego, seated, at the Capitol on Monday.
(Full-size photo)

Kansas has troubles

 TOPEKA, Kan. – Kansas has suspended income tax refunds and may not be able to pay employees on time, state officials said Monday.

 The state doesn’t have enough money in its main budget account to pay its bills, prompting Democratic Gov. Kathleen Sebelius to suggest borrowing $225 million from other accounts throughout state government. But the move required approval from legislative leaders, and Republican leaders refused Monday.

 Budget Director Duane Goossen said that without the money, he’s not sure the state can meet its payroll. About 42,000 state employees are scheduled to be paid again Friday.

 He added that the state might also have to delay payments to public schools and to doctors who provide care to needy Kansas residents under the Medicaid program.

 Goossen said the state stopped processing income tax refunds last week.

 GOP leaders are hoping to pressure Sebelius into signing a bill making $326 million in adjustments to the budget for the fiscal year that ends June 30. Almost half of the adjustments are spending cuts.

Associated Press

SACRAMENTO, Calif. – California lawmakers on Monday were locked in a frustrating search for one more vote to approve a $42 billion budget-balancing plan state leaders say is needed to stave off fiscal disaster.

The stalled effort prompted Gov. Arnold Schwarzenegger to make good on an earlier promise to begin the layoff process for thousands of state workers, though under the state’s process it would take months for anyone to actually be laid off.

Lawmakers were in session for a state-record 30 hours before disbanding Sunday night, with many of them looking haggard and worn out after a futile attempt to secure the necessary votes. They regrouped Monday, but the expected budget votes kept getting pushed back.

By Monday night, Senate leader Darrell Steinberg announced that lawmakers had failed to find the final vote in his chamber as Republicans refused to support more than $14 billion in tax increases. He called a session for this morning and said he would put the tax provisions of the budget proposal up for a vote, even if they would not pass.

Lawmakers have been trying to pass a combination of spending cuts, tax hikes and additional borrowing negotiated by Schwarzenegger and leaders of both parties, who warn that California faces insolvency unless the Legislature enacts a midyear budget fix to close the projected $42 billion budget shortfall through June 2010.

The plan continues to fall short of votes because rank-and-file Republicans have refused to agree to $14.4 billion in higher taxes. Lawmakers believe there are enough GOP votes in the Assembly, but the Senate has fallen short by one.

State workers have been furloughed because of the budget crisis, some 2,000 public works projects are on hold and tax refunds and payments to vendors have been delayed. The state controller says the state will run out of cash at the end of the month if lawmakers do not act.

The governor had delayed releasing layoff notices on Friday when it appeared lawmakers would pass a compromise plan, but with marathon weekend sessions failing to produce the necessary votes, Schwarzenegger’s spokesman said the administration had no choice.

The notices will start going out today to 20,000 workers in agencies that receive money from the general fund. Administration officials are seeking to eliminate up to 10,000 jobs as part of the governor’s order to cut 10 percent from the payroll.

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