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
"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.