California lawmakers to vote on budget plans

SAN FRANCISCO (Reuters) - California lawmakers will vote on rival plans for closing a $19 billion deficit and balancing the state's budget on Tuesday, the last day of their legislative session, aides said on Friday.

The votes in the state Senate and Assembly will be symbolic gestures since Democrats who control both chambers and Republican lawmakers and Republican Governor Arnold Schwarzenegger remain far apart on how to close the shortfall in the state's budget for the fiscal year that began on July 1.

"We're going to see where the votes land," said Alicia Trost, a spokeswoman for Senate President pro Tem Darrell Steinberg. "We didn't want the legislative session to end without a full public debate on the budget."

Schwarzenegger's plan for balancing the state's books, embraced by the legislature's Republican minority, rules out tax increases and relies largely on slashing spending.

Democrats cannot accept such deep cuts and have put together a plan that would increase some taxes, impose an oil production tax and postpone corporate tax breaks to raise revenue.

Schwarzenegger has also said he will not accept any budget plan unless it also includes provisions for overhauling the state's pension system to reduce its cost to the state government.

Despite controlling the state Senate and Assembly, Democrats do not have enough votes on their own to advance budget plans to the governor's desk.

Schwarzenegger plans to call lawmakers into a special session on the budget, which the legislature should have had approved in mid-June. State Controller John Chiang has said he may have to issue IOUs as soon as next month if a budget is not in place to preserve cash for priority payments, including payments to investors holding California's debt.

(Reporting by Jim Christie; editing by Andre Grenon)