California resolves budget standoff

California Senate President Pro Tem Darrell Steinberg urges GOP help to break the budget impasse.
The California Senate finally passed the state’s budget on Thursday morning after a marathon session. The legislation received final approval from the state Assembly minutes later.

The budget package addressing a $42 billion deficit passed after lawmakers agreed to demands from a holdout Republican senator. The package includes tax increases, spending cuts and borrowing to close the deficit, reports said. “This is not really a time of celebration, when you think about the difficult decisions that we have been called upon to make,” Senate President Pro Tem Darrell Steinberg, D-Sacramento, told colleagues following the vote shortly after 6 a.m. PT. “It is, however, a time of great relief that this crisis is behind, not us, but behind the people of California.” The stalemate over the budget had caused California Gov. Arnold Schwarzenegger to declare a fiscal emergency and send layoff notices to 10,000 state workers. Sen. Abel Maldonado had been one Republican amenable to vote for the measure in exchange for various demands, and lawmakers worked to meet them to get his support. Senators voted for a measure to revise the state’s constitution to permit “open” primaries for legislative, congressional and gubernatorial elections. They also passed another, the removal of a 12-cent additional gas tax increase.

Don’t Miss
CNN/Money: Obama plan to aid 9 million homeowners

California budget crisis jeopardizes 20,000 jobs

KCRA: Schwarzenegger vows no budget talks from scratch

Even though several members didn’t like the open primary plan, they still voted for it to get the budget passed. The Senate worked through the night. All Democrats were prepared to vote for the budget hours earlier, but one more Republican was needed to reach a majority vote, Steinberg said at a news conference just after midnight. “We need one more member. One more member. We need one more,” said Steinberg, raising his voice as he pointed to a large placard with No. 1 written in red. “My door is open for any Republican that wants to put the state first.” U.S. Sen. Barbara Boxer, D-California, also was there Thursday morning and reminded lawmakers that Democrats in the U.S. Senate were able to get just enough Republican votes to pass President Obama’s $787 billion stimulus plan. Interactive: See where the stimulus money is going » “We have to put aside all this ego and put the people of California first,” Boxer said. “The people of California do not deserve the fate they will receive if it is not passed.” Without a new budget, 276 public works projects would have been halted Thursday, an additional 10,000 state workers could have received layoff notices and California might not receive parts of the federal economic stimulus package, lawmakers said. The Republican governor had butted heads for months with the Democratic majority over easing the state’s $11.2 billion revenue shortfall this fiscal year alone. Cuts would save California $750 million for the year. Watch more on California’s budget woes » In Kansas, leaders Wednesday ended a standoff that had delayed tax refunds and state paychecks by agreeing to borrow $225 million from various state accounts, a spokeswoman for the governor’s office said. Republican lawmakers approved moving money into the state’s main account to pay the bills after Gov. Kathleen Sebelius agreed to budget cuts, spokeswoman Brittany Stiffler said. The state resumed processing income tax refunds on Wednesday — they had been suspended last week because of low funds — and state employees’ paychecks will be paid on time Friday, Department of Administration spokesman Gavin Young said. Republicans earlier this week denied the Democratic governor’s request to move the money, saying they could not approve the certificate of indebtedness, also known as internal borrowing, until they knew the state could repay the money by June 30, the end of the fiscal year. However, Republicans said they would be likely to approve the internal borrowing if Sebelius agreed to the Legislature’s proposed budget cuts for the 2009 fiscal year. On Wednesday, she approved about $300 million in budget cuts. “She blinked, and that’s helpful,” Senate Majority Leader Derek Schmidt, a Republican, said Wednesday. Sebelius said, “I’m just sorry we had to have high drama and worry a lot of Kansans about our ability to pay our obligations.” The Kansas Legislature was one of several to meet this week to address budget concerns in a time when 43 states are starting the year short on funds, according to the National Conference of State Legislatures.

“This is an equal-opportunity recession. States in virtually every part of the country are suffering. … Even the energy states are starting to report problems,” Corina Eckl of the National Conference of State Legislatures said. What you’d fix first “For most, it has only gone downhill. They have tried to make up the difference with expanded gambling, with delays of construction projects, with hiring freezes, with fee and tax increases. But almost all of this has failed to regain lost ground, merely serving as a firebreak against worse troubles.” Map: See estimated stimulus benefits by state »