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Senate approves California budget, but Assembly still debating the plan

July 24, 2009 |  7:08 am
The state Senate this morning approved a budget package that would close the state’s $26.3 billion deficit, after working through a grueling all-night session. But lawmakers in the Assembly had yet to take up some of the most controversial portions of the plan. 

The legislators moved in a slow and painstaking fashion through about 30 separate pieces of legislation that represented the product of their leaders’ agreement with Gov. Arnold Schwarzenegger to close the monumental budget hole that has forced the state to send IOUs to residents and businesses.

 At one point before dawn, it appeared the package was in danger of failure, as legislative leaders struggled for votes on provisions to raid local government funding.
 But after some arm-twisting by Senate Leader Darrell Steinberg (D-Sacramento) and Minority Leader Dennis Hollingsworth of Murrieta, a number of lawmakers from both parties voted for those provisions and the Senate was able to finish its work shortly after 6 a.m.

 “We don’t know whether or not we will be back at this,” Steinberg told his colleagues, looking visibly relieved. “We probably will, but I must tell you, we can change California …. We can find common ground more often than not …. Let’s turn this place around.” Added Hollingsworth, “We all know that we’ve just been through something that was a big challenge.” 

One potential sticking point in the Assembly remains a bill that deals with how schools would be repaid some of the money the state is cutting. Assembly Republicans do not want to approve the version that passed in the Senate, which has now adjourned until August. 

If the Assembly does not ratify the same version, the bill can’t become law. As the evening began, lawmakers were able to push through about half of the budget package relatively quickly. 

They agreed to cut billions of dollars from higher education, courts, grants to college students, healthcare, welfare, and home health aides for the elderly and disabled. They reorganized state boards and commissions, and required Californians to pay taxes earlier through payroll withholdings. But in the middle of the night, they hit a roadblock. Not enough Republicans or Democrats were willing to vote to borrow $1.9 billion in property taxes, take local coffers for $1 billion in transportation funds and seize an additional $1.7 billion from redevelopment agencies. 

Cities have threatened to sue over the last provision, and local government officials have protested all of it. In the Senate, which took up those measures first, Steinberg railed against city and county officials who have campaigned against the state’s effort to borrow from them under Proposition 1A, which the local officials supported in 2004. 

The money would have to be returned within three years with interest. “We are living through the emergency of all emergencies,” he said. “How can you in good conscience oppose saving the state of California from IOUs and fiscal catastrophe?” 

Attempting to placate lawmakers who opposed taking local transportation funding, Steinberg and Assembly Speaker Karen Bass (D-Los Angeles) amended their plan so that the money would be repaid over 10 years, and Bass trekked down to meet with the governor’s aides to make sure Schwarzenegger would go along. That plan narrowly won approval in the Senate.

 As of this morning, the Assembly had yet to vote on it. As the hours dragged on, lawmakers waited for bills that had not even been drafted yet, and they cast their votes on legislation they had barely been able to peruse. Several lawmakers sent streams of consciousness out to the world with regular postings on Twitter. “What do members do in between bill votes?” wrote Assemblyman Tony Mendoza (D-Artesia).“We gather in members lounge and sing Hotel CA with guitar: gathered around like in a campfire. Nice.”

 Early in the morning, the Senate easily approved another issue expected to be contentious: a provision to allow the first oil drilling in state waters off California's coast in 40 years. The state would receive $100 million in royalties from the company that takes the oil.

 Many Democrats and environmentalists were rallying against it. "Every member is free to vote their conscience on the bill," Assemblyman Pedro Nava (D-Santa Barbara) had said earlier. "And I'm trying to make sure their conscience tells them no."

-- Michael Rothfeld and Shane Goldmacher, reporting from Sacramento