Despite all-night session, California budget still stalled

SACRAMENTO, Calif. – Gov. Arnold Schwarzenegger tried Sunday to salvage a proposal to close California’s $42 billion deficit after an all-night legislative session failed to produce a new budget.

The governor and legislative leaders from both parties warned that California faces insolvency unless the Legislature enacts a midyear budget fix.

Blame for the inaction was fixed on the state Senate, where Republicans were refusing to put up the three votes necessary to reach the required two-thirds majority. The Assembly appeared ready to pass the mix of deep spending cuts and tax increases but was awaiting signals that the Senate would do the same.

“The only thing we’re waiting on is the tax bill. I’m confident we have the votes. Our concern is we don’t want to get stuck here,” Democratic Assembly Speaker Karen Bass said. “The problem is in this house.”

After meeting all night, both chambers called recesses Sunday morning so lawmakers could nap and shower after a record-setting 30-hour session.

The Senate resumed budget debate Sunday afternoon. Senate leader Darrell Steinberg angrily brought the session to a close Sunday night after a Republican lawmaker complained that the package of spending cuts, tax hikes and borrowing designed to erase the deficit had been put together in secret.

Steinberg said the Senate will continue to meet daily until it breaks the deadlock.

“To me, in the end, this budget has to pass because the state of California needs it to pass,” Steinberg said.

The budget crisis is dire: tax refund checks and payments to state vendors have been delayed; some 2,000 public works projects have been stopped because the state has no money to pay for them; and California’s credit rating is so bad the state can’t get loans.

Schwarzenegger, meanwhile, has ordered furloughs for state government workers and has threatened layoffs for as many as 10,000.

“The only alternative now is to literally go insolvent and over the cliff, and many of us believe that is irresponsible and giving up our constitutional responsibilities,” said Assembly Minority Leader Mike Villines, a Republican.