Schwarzenegger could leave Calif. without budget

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LOS ANGELES (AP) — Without a budget resolution in sight, Gov. Arnold Schwarzenegger hinted Monday that he might not sign a budget before he leaves office next January unless he gets the reforms he wants.

California faces a $19 billion deficit for the fiscal year that began July 1, and Schwarzenegger is demanding pension, tax and spending reforms in the new budget. He said that if the Legislature doesn’t give him a budget that meets his expectations, he won’t act on it.

“If I don’t get all of the things that we need in order to be fiscally responsible … I will not sign a budget and it could actually drag out until the next governor gets into office,” Schwarzenegger told reporters after meeting with the Los Angeles Area Chamber of Commerce on Monday.

Schwarzenegger also told the chamber that he opposes a ballot initiative in November to pass a budget with a simple majority vote of the state Legislature, rather than the current two-thirds majority.

Earlier this month, the Field Poll found that 65 percent of voters favor Proposition 25, which backers say would make it easier for lawmakers to pass a budget.

According to the National Conference of State Legislatures, only California and Rhode Island have a two-thirds vote requirement for passing a budget, while nearly all other states require a majority budget vote. Arkansas has the toughest requirement with a three-quarters budget vote.

The governor, a moderate Republican, said allowing passage of a budget by simple majority vote would give too much power to the dominant party in the Legislature.

“One party will make all the decisions,” Schwarzenegger said.

California isn’t facing a cash crisis as severe in the past, but without a budget the state will start to have trouble meeting its obligations.

According to the state controller’s office, California will have enough cash for the month of August. After that, the state has to delay payments to schools and local governments and possibly issue IOUs again.

The governor on Monday tried to stress the severity of the state’s financial problems as California entered its fourth week of the new fiscal year without a balanced budget. For weeks, there have been no signs of progress.

“I don’t want to hand this problem and this burden over to the next governor, so I am absolutely committed that I will not sign a budget if we don’t have all of those reforms in place,” Schwarzenegger said.

In recent years, the Democratic leaders who control the Assembly and Senate have agreed to one budget plan, which is then negotiated with Republicans and the governor. This year, however, the two leaders released separate plans and have agreed only in principle to protect funding for schools and social programs for the poor.

The two Democratic leaders — Assembly Speaker John Perez of Los Angeles and Senate President Pro Tem Darrell Steinberg of Sacramento — said Monday they won’t accept a cuts-only budget as proposed by Schwarzenegger and backed by Republican lawmakers.

Instead, Democrats are calling for a delay in corporate tax breaks and adoption of a new oil tax.

“If the governor continues to insist on granting billions in corporate tax cuts financed by drastic cuts to public education and programs for working mothers and their children, I am prepared to grant his wish by waiting for the next governor,” Steinberg said in a statement.


Associated Press Writer Judy Lin in Sacramento contributed to this report.

(This version CORRECTS Corrects governor’s quotes. This story is part of AP’s general news and financial services.)