Wednesday, August 13, 2008


By Jim Sanders - Sacramento Bee

Posted 10:52 am PDT Wednesday, August 13, 2008 - Senate President Pro Tem Don Perata said Wednesday that Democrats have negotiated key points of a compromise state budget with Gov. Arnold Schwarzenegger and that he considers negotiations over.

"I think we've, frankly, gone about as far as we can go," the Oakland Democrat said.

Perata said the compromise plan includes a major concession by Democrats -- a spending cap to limit annual state expenditures.

Republicans have been insisting on a spending cap as part of any budget pact.

"The question continues to be, are there Republican votes for it?" Perata said of the compromise plan.

The ball is in Schwarzenegger's court, he suggested.

"A Republican governor should have some sway over Republicans," he said.

Perata said he had not yet seen draft language of the compromise.

Other key elements of the compromise plan include a temporary 1-cent increase in the state sales tax and a rainy-day fund to sock money away in boom years.

Perata did not elaborate on details of the proposed spending cap, but said it was intended to break the current standoff with Republicans.

"We've said to the governor, 'What do you need in order to move forward?' So we've negotiated on that point," Perata said.

"I'll guarantee you that there won't be anybody in the house that's going to be happy with the conclusion. But it is a compromise -- new revenues and program cuts, and no borrowing."

Perata said the negotiated proposal does not grant the governor authority to make midyear budget cuts if the economy nosedives.

"We've always said that we're not doing anything that gives away the legislative responsibility for appropriating money in the budget," he said.

Assemblyman John Laird of Santa Cruz, a Democrat who serves as a point man in the Assembly on budget issues, declined to comment on Perata's characterization of the negotiations.

Perata said the next step is to place the compromise spending plan before the Senate for a vote.

He said that no vote will be taken today, however, and that he did not want to call for a vote if the proposal was certain to die.

Passage of a state budget requires a two-thirds vote in each legislative house.

"When we go (for a vote), we're going because it's a budget that the governor can get some votes for," Perata said.

Bakersfield Rep. Roy Ashburn left the door open Wednesday to voting in favor of a compromise plan. At least two GOP votes are needed in the Senate.

Ashburn said he has been talking with the governor's office, and that his understanding is that the compromise would include a temporary sales tax increase -- that would last for several years and then revert to a permanent tax reduction -- as well as solid budget reform and an economic stimulus package.

The stimulus package would provide tax advantages meant to "help create jobs and stimulate the economy," Ashburn said.

"This is a proposal that I'm interested in looking at, and we will see if this, in fact, is what is brought to the Senate for consideration," Ashburn said of what he understands the budget compromise to be.

Ashburn said he feels no pressure to close ranks with GOP dissenters.

"The people have sent each of us here to do a job," he said. "And I think establishing the fiscal health of California is about the most important job that legislators have right now."

Assembly Republican Leader Mike Villines, R-Clovis, said Perata overstated the extent to which his negotiated plan would blunt future spending. Though GOP lawmakers are open to concessions to Democrats if the budget includes a spending cap, Villines said Perata's negotiations with the governor have not accomplished that goal.

"There is no spending cap," Villines said. "It'd be a phony cap, if anything. And I've seen it all. It's all for a rainy-day fund, which is a good start. But it's not a hard spending cap that would solve the problem. You can characterize it anyway you want, but it is what it is."

Perata says he has budget deal with Schwarzenegger, needs GOP votes -

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