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Jerry Brown vetoes Democratic budget plan [Updated]

June 16, 2011 | 10:35 am

Brown at a Capitol news conference in Sacramento Monday.

Gov. Jerry Brown has vetoed the budget package passed Wednesday by Democratic legislators,  sources say, which creates a potential rift within his own party.

The sources said an announcement was expected soon.

[Updated at 10:42 a.m., June 16: Brown announced the veto in a press release Thursday. "Unfortunately, the budget I have received is not a balanced solution," his statement said. "It continues big deficits for years to come and adds billions of dollars of new debt. It also contains legally questionable maneuvers, costly borrowing and unrealistic savings. Finally, it is not financeable and therefore will not allow us to meet our obligations as they occur."

Read the governor's official veto message here. He also released a Youtube video, below, explaining the decision.]

The plan contains higher taxes, billions of dollars in delayed payments to schools, and various accounting maneuvers to balance the books. Brown had previously warned that he would not sign a budget containing such accounting gimmicks.

Democratic leaders in the Assembly and Senate said the plan they passed Wednesday was crafted without input from the administration.

It is unclear whether state lawmakers will receive their paychecks in the wake of the veto. Under a  law passed by voters last year, legislators lose pay if they fail to send the governor a budget by June 15. Lawmakers said Wednesday they believe the budget they passed meets that test, but Controller John Chiang, California's chief financial officer, will decide whether to issue their paychecks.

Brown's veto is the latest twist in a budget process that has been just as divisive and partisan as it was under his predecessor, Arnold Schwarzenegger.

Senate Republicans had been negotiating with Brown on his preferred plan, which would include a fall election on higher taxes. They want pension changes and a limit on future state spending in return for their support, and Brown has said he is willing to go along. But the Republicans say they have not met with the governor for more than a week.

Brown is scheduled to hold a news conference around noon at his office in Los Angeles.

RELATED:

California Democrats pass budget with taxes, cuts and tricks

Skirmish breaks out on Assembly floor during budget debate 

Editorial: California Gov. Jerry Brown should hold out for a budget deal 

-- Anthony York

Photo: Brown at a Capitol news conference in Sacramento Monday. Credit: Rich Pedroncelli / Associated Press

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