Still no deal as budget veto looms

SACRAMENTO A deal would avoid an unprecedented budget veto the governor threatened by Friday. It would also allow the state to start paying its bills once again.

However, even after continuing talks Thursday morning, a compromise had not been reached between the governor and the four leaders of the senate and the assembly.

During that meeting Governor Arnold Schwarzenegger (R-California) issued an ultimatum: He demanded that the state no longer allow easy access to the state's money reserves and that the state needs to stop the accounting gimmicks to address the budget deficit.

Leaders are willing to give the governor the following:

  • Tighten controls on the state's rainy day fund
  • Kill the proposal allowing the state to temporarily withhold an extra 10 percent from paychecks
  • Double the penalty for corporations that underreport their taxes
  • Remove the Tax Amnesty Program
"There is no agreement at this point. They came down and they asked for more time. The governor wants to work out an agreement with the legislative leaders," said Aaron McLear, Governor Schwarzenegger's press secretary. "We told them we'll try to work this out. You have until tomorrow. So as we've been saying all week, we plan to veto the budget tomorrow. The governor will veto the budget tomorrow. Unless they are able to reach an agreement."

"The governor is the leader of the state. And, what he says is just not like another person in my caucus. His vote is bigger than 120 votes," said State Senator Don Perata (D-Senate President). "He laid down what he wanted and he said he was not going to relent. So those who have the gold make the rules."

Both the senate and the assembly have scheduled sessions for late Friday afternoon.


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