Budget standoff: Summit frazzles top Democrats
Perata and Núñez say the Republican leaders want deals over two fiscal years.
By Alexa H. Bluth -- Bee Capitol Bureau July 3, 2005

Gov. Arnold Schwarzenegger and four top legislative leaders failed to reach a state budget agreement after meeting behind closed doors at the Capitol for more than six hours Saturday.

The group planned to meet in the Governor's Office today to try again to resolve their differences over a small piece of the more than $115 billion plan.

Legislative leaders called the daylong session of meetings with the governor and budget staff productive, but they said Republicans and Democrats still differ on the amount of red ink a budget compromise would leave in future years.

Clearly frustrated as they exited the meetings, Senate President Pro Tem Don Perata and Assembly Speaker Fabian Núñez said Democrats had acquiesced to many GOP requests, including avoiding tax increases.

But they said Republicans also are demanding to improve the state's budget outlook for next fiscal year.

"We're stuck, it would appear," Perata said.

"We can't even solve this year's budget, and they want us to solve next year's budget."

Republicans had a slightly different take on the day's events, though they declined to say specifically what progress had been made.

"There's definite movement forward," said Assembly Republican leader Kevin McCarthy. "We're a lot better off than we were prior to coming in today."

Schwarzenegger's first budget and several from previous years have been balanced on paper when they were signed, but have not brought the state's spending obligations and revenue into permanent balance.

The governor's May budget proposal also would leave the state with a future deficit, but less so than that proposed by Democrats.

For his second straight year, Schwarzenegger is locked in a dispute with lawmakers over the state budget beyond the July 1 start of the fiscal year. Last year, he signed the state budget nearly a month late.

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