Pension talks holding up state budget, says Schwarzenegger spokesman

Democrats' unwillingness to change state employee pension benefits is delaying a vote on the state budget, according to a spokesman for Gov. Arnold Schwarzenegger.

Schwarzenegger spokesman Aaron McLear said Tuesday that "the main sticking point is pension reform. ... Democrats are unwilling to stand up to the union bosses."

Alicia Trost, a spokeswoman for state Senate President Pro Tem Darrell Steinberg said McLear's assessment was "not correct. There are a number of issues that remain unresolved."

Democrats close to the discussions said one of those issues is a series of new tax breaks being pushed by Republican lawmakers.

Leaders have apparently come to an agreement on some kind of budget reform, but no details were available. The issue of changing the state's tax system, another Schwarzenegger demand, is apparently unresolved and may not be a part of this budget.

"We offered up an intelligent tax-reform proposal, and it doesn't appear they are interested in it," Trost said.

Contract negotiations continue between the Schwarzenegger administration and Service Employee International Union Local 1000, the largest state employee union, representing more than 90,000 workers. If a deal can be reached through the collective-bargaining process, that would pave the way for a budget deal, McLear said.

-- Anthony York in Sacramento