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No meeting by California leaders on budget plan
September 28, 2010 / 10:47 PM / 7 years ago

No meeting by California leaders on budget plan

SACRAMENTO, California (Reuters) - California’s leaders will not meet on Tuesday as planned to hammer out details of a state budget agreement to close a $19.1 billion deficit, a spokesman for Governor Arnold Schwarzenegger said.

Instead their staff will work through Tuesday to refine a potential spending plan, according to Schwarzenegger spokesman Aaron McLear.

The government of the most populous U.S. state on Tuesday marked a record 90-day-long budget stalemate between Democrats -- who control the state legislature -- and Schwarzenegger and fellow Republicans in the body’s minority.

The two sides last Thursday said they had a framework for a budget compromise and expressed optimism an agreement would be reached on a spending plan by Monday.

But lawmakers on Monday evening said they had more details to iron out, including on the issue of pension reform pressed by Schwarzenegger, and that negotiations would resume Tuesday.

Talks are now likely to resume Wednesday, McLear said.

Lawmakers were supposed to have approved a budget in mid-June so it could be in place by the July 1 start of the state’s fiscal year.

California’s lawmkakers rarely meet those deadlines and the task of balancing the state’s books has become more contentious in recent years owing to a deep revenue slump caused by the combined effects of the housing downturn, mortgage crisis, financial market turmoil and double-digit joblessness.

ANXIOUS VOTERS

The current budget standoff is taking place in a volatile election year and has voters in a foul mood just weeks before they determine whether Attorney General Jerry Brown, a Democrat, or Republican Meg Whitman, the former chief executive of eBay Inc, will be California’s next governor.

“I think disgust has replaced outrage,” said Jack Pitney, a professor of government at Claremont McKenna College.

Field Poll survey results released Tuesday show the budget stalemate dragging down the job-performance approval for Schwarzenegger and lawmakers.

“Voters believe that all participants, regardless of position or partisan stripe, share the blame for the failure to pass a state budget on time,” the Field Poll report said.

Fewer than one in four voters approves of the job Schwarzenegger is doing and only one in ten approves of how the legislature is performing -- the lowest level in the 27 years the Field Poll has tracked sentiment toward lawmakers.

“Voters are starting to believe there is something structurally wrong or amiss with the way the legislature is operating,” said Field Poll director Mark DiCamillo.

PENSION PITFALLS

Reforming California’s public pension system is one of the main reasons a budget compromise is being held up.

Schwarzenegger has made changes that would lower the system’s cost to the state’s general fund a condition of his signature on a spending plan.

He wants a two-tier pension system in which new public employees receive reduced benefits, but Democrats allied with public employee unions are hesitant to sign on to an effort that undermines collective bargaining.

The debate over public pensions is taking place while Schwarzenegger’s administration attempts to convince the Service Employees International Union, the largest union representing state workers, to agree to a pension overhaul.

His administration has notched pension reform deals this year with other bargaining units. They include increases to retirement ages and individual employee contributions to pension accounts, changes that local governments across California facing money woes of their own are also pursuing.

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