No progress as lawmakers seek to meet midnight deadline

SACRAMENTO BEE 

Published Tuesday, Jun. 30, 2009

With the clock ticking toward a midnight deadline, Senate Republicans again rejected a three-bill, stopgap package this morning that is designed to help the cash-strapped state avoid IOUs.

But negotiations over a solution are expected to continue all day and evening, as lawmakers seek resolution before midnight.

The measures would keep state government from running out of money immediately and provide more time for lawmakers and Gov. Arnold Schwarzenegger to negotiate a comprehensive solution to California's $24.3 billion shortfall.

The three-bill package requires a two-thirds vote in the Legislature to take effect immediately. The Assembly has passed the proposals, but the Senate balked Monday night and again this morning along party lines.

Senate President Pro Tem Darrell Steinberg immediately placed the package on call, meaning a final vote will be taken later today.

The three-bill stopgap package would free up money by cutting spending on education in the fiscal year that ends at midnight tonight; defer some payments to schools, colleges and local governments; and redirect money from local redevelopment areas to school districts.

If the bills are not signed by midnight tonight, the state loses the chance to save $3.3 billion in cuts still available in the expiring fiscal year.

After the Senate's 30-minute session this morning, Steinberg said he will negotiate with legislative leaders and with Schwarzenegger in hopes of reaching agreement before midnight.

"We know we have significant differences, but I'm going to use every ounce of my energy and ability to try to find a reasonable conclusion," he said.

Asked if Democrats and Republicans were any closer to a compromise deal today than they were Monday night, Steinberg said no.

"Not so far," he said simply. "But it's early in the day."

Sen. Bob Dutton, a Rancho Cucamonga Republican who served as the GOP point man on the joint legislative budget conference committee, said he is encouraged only by the fact that all sides are talking.

Schwarzenegger has resisted a stopgap solution, saying that he wants a deal on the entire $24.3 billion shortfall.

State Controller John Chiang has said that he will begin issuing IOUs on Thursday unless a deal is struck immediately.