GOP Legislators Block State Budget

SACRAMENTO —  Republicans in the Legislature spoiled an effort by Democrats to meet Wednesday’s constitutional deadline for passing a state budget, calling the plan too expensive -- although it differed little from the one proposed by the Republican governor a month ago.

Only eight Republican votes were needed for lawmakers to approve the $115.7-billion budget bill and send it to the governor’s desk for his signature. But all Republicans in both houses voted no, saying they opposed some spending in the Democratic plan that was not in the governor’s budget.

The bill was defeated 45 to 32 in the Assembly and 25 to 13 in the Senate. “Our goal is to reduce spending as much as we can,” said Senate Republican leader Dick Ackerman of Irvine. “This budget is not quite there.”

Even so, Democratic leaders said, the unresolved issues were minor, and they expressed confidence that final agreement was only days away.

The budget the Democrats presented largely conceded to the demands of Gov. Arnold Schwarzenegger to limit spending in several areas. The lawmakers had abandoned their demand that he give $3 billion more to schools, and that the budget include new taxes on wealthy Californians.

Democrats did not want to wage a prolonged budget battle after Schwarzenegger this week called a Nov. 8 special election. They feared that a fight could motivate voters to pass state spending controls he helped place on that ballot.

In addition, the influential California Teachers Assn., which is threatened by that measure and one that could hamper unions’ ability to fund political campaigns, counseled the Democrats -- who benefit from union donations -- to move on.

Republicans said Wednesday that they would hold out for more concessions. Republicans said Democrats should be finding ways to spend less money, not more.

“It’s a budget that is going in the wrong direction,” said Assemblyman Keith Richman (R-Northridge). “The budget on the floor today is fiscally irresponsible.”

Democrats accused the administration -- whose blessing Republicans seek before they will sign off on the budget -- of playing politics.

“Unfortunately, there are people outside of this chamber who would hold the budget hostage and intimidate this institution for narrow political gain,” said Senate President Pro Tem Don Perata (D-Oakland), referring to the governor. Still, Assembly Speaker Fabian Nunez (D-Los Angeles) expressed hope that the budget could be approved by next week.

“We are going to continue to try to work with them in the hopes we can get a budget soon,” he said.

No more budget votes are expected this week. Legislative staffers will huddle with administration officials through the weekend, seeking compromise on the few remaining disagreements.

“We missed the constitutional deadline,” Nunez said, “but that does not mean we should not be working hard and diligently to get a budget in the next week or week and a half.”

Republicans, who until this week had been expecting Democrats to resist the governor’s budget plans, said during Wednesday’s debate that they had too little time to examine the details of the budget bill, that it defers too many costs, and that it leaves in place programs the state may be unable to afford in the future.

“It digs a deeper hole next year,” Ackerman said. Separating the two sides is about $1.1 billion in spending -- less than 1% of the budget. Democrats want to wait another year before repaying $600 million borrowed from local governments to balance last year’s budget, and they want the state to sell about $500 million in bonds that the administration opposes.

The $1.1 billion would be used mostly to restore cuts that Schwarzenegger wants in social service and healthcare programs.

Administration finance director Tom Campbell said the state cannot afford to spend that money.

“The Legislature rejected a budget that used one-time money on permanent spending proposals,” he said. “It was wise to reject that dangerous approach.”

Though Democrats have dropped their demand that the $3 billion for schools be included in the budget, they have vowed to try to get that money by other means. Perata has suggested that they may try to put a constitutional amendment on the November ballot that would raise taxes on the wealthy to supply the funds.

Such a measure, like the state budget, would require two-thirds of the Legislature -- including eight Republicans -- to vote for it.

On Wednesday, a bill in the Assembly that would have generated a similar tax hike was defeated when all of the chamber’s 32 Republicans voted against it.

“The spending addicts are back to score their fix once again,” said Assemblyman Ray Haines (R-Murrieta). “Just like the common heroin addict, you are going to steal the money.... And you are going to justify the theft by saying the people you are doing this to are rich.”

Democrats said the bill would simply have restored the income tax rates that were in effect when Republican Gov. Pete Wilson was in office. The proposal would have raised income taxes on single Californians earning more than $142,500 a year and on couples earning more than $245,000.

The measure would have generated $1.3 billion annually for schools and community colleges. It would have boosted the budget of the Los Angeles Unified School District, for example, by more than $124 million a year, or $179 per student.

As the budget debate continued in the Legislature, the governor was on the campaign trail, stumping for his spending controls before two dozen small-business owners at the Grove Body Shop in Garden Grove.

The governor spoke mostly about tax-hike proposals that were introduced in the Legislature but never made it through committee, and thus are not under serious consideration: He talked of lawmakers wanting to weaken Proposition 13, which limits property tax increases; raise vehicle license fees; and increase the state sales tax.

“They want to punish all of you,” Schwarzenegger said. “Even though you may think they haven’t talked much about the sales tax [increase], the rumble is there,” he said of legislators. “They say, what about a half-cent on the sales tax, what about bringing back the car tax? I say no, we have to live within our means. We have plenty of money in California.”

Like the budget, a sales tax increase would require approval by two-thirds of the Legislature.

Times staff writers Jean Pasco and Jordan Rau contributed to this report.