California Struggling to Approve Budget
California Lawmakers Struggle to Break Budget Impasse; Six Other States Face Deadlines
The Associated Press
SACRAMENTO, Calif. June 30 —
With the state on the verge of a financial meltdown, California lawmakers struggled Monday to break a partisan impasse and meet a midnight deadline for passing a new budget.
At least five other states Connecticut, Nevada, New Jersey, Oregon and Pennsylvania also faced a July 1 budget deadline.
New Hampshire lawmakers Monday gave themselves until Oct. 1 to negotiate a new spending plan, and Oregon's governor signed a stopgap bill Monday allowing state agencies without new budgets to continue operating at least through July 31.
New Jersey lawmakers late Monday reached a deal to balance the $24.1 billion budget including a tax plan for casinos though they continued to hammer out details, a process expected to last past midnight.
But nowhere are the stakes higher than in California.
The state faces a record $38.2 billion budget shortfall and is operating for the first time completely on borrowed money. State Controller Steve Westly says the state only has enough cash to get through mid-August, and officials say the state cannot borrow any more until a new budget is passed.
Without a new budget by the deadline, the state is unable to legally make millions of dollars in on-time payments to schools, community colleges, courts, state suppliers and others.
The salaries of the governor, legislators, state appointees and about 1,000 non-civil service employees will also stop Tuesday, although most of the state's 200,000 workers will continue receiving their full pay at least for now.
Gov. Gray Davis, who spent the weekend in New York celebrating his mother's 80th birthday, expressed disappointment that the deadline looks like it will not be met.
"We still have an opportunity to find common ground. Failure to do so would be irresponsible and dangerous," Davis said. "Critical funding for hospitals, nursing homes, community colleges and small businesses is at stake."
But the likelihood of a budget agreement anytime soon appears remote. Democrats, who hold big majorities in both houses, need Republican support to approve a spending plan.
California is one of the few states that require a two-thirds majority to pass the budget and Republicans have more than enough votes to block passage as long as they want.
Davis has proposed a budget plan that includes a mix of service cuts, borrowing and higher taxes to bridge the gap.
Republicans say they won't support new taxes, while Democrats are unwilling to cut enough to balance the budget without new taxes.
Last week a budget from Democrats totaling nearly $100 billion was shot down twice in the Senate. Republican Senate leader Jim Brulte of Rancho Cucamonga said even with a half-cent increase in the sales tax, spending was still more than $10 billion out of balance with income.
A similar Democratic budget plan drew little interest in the Assembly last Friday. Assembly Republicans released their own proposal Monday, a plan quickly condemned as "destructive" by Democrats.
California lawmakers have missed the state's constitutional deadline of June 15 for adoption of a budget 18 times in the last 22 years. The Legislature has begun the new fiscal year without a plan in place nine times in the past 13 years.
Last year's budget was delayed a record 76 days.
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