California lawmakers reach compromise on budget

The deal comes days after Democratic Senate leaders abandoned their months-long crusade to close the $15.2-billion budget gap with the help of taxes. They argued that balancing the budget any other way would be fiscally irresponsible and bleed state services.

But even with the help of Gov. Arnold Schwarzenegger, Democrats were unable to get enough Republican lawmakers to sign onto a tax hike. The budget can be passed only by a two-thirds vote, meaning it would require the support of at least eight Republicans.

"It was time to end this," said Senate President Pro Tem Don Perata (D-Oakland).

Details of the final budget package have not been released. Without a tax increase, it is likely to include accounting maneuvers and other financial gimmicks that would push much of the budget gap into next year. Democrats had vowed they would never balance the budget through cuts alone, and even Republicans who held the line against taxes were unable to show how the gap could be wiped out entirely with spending reductions. Their own budget plan relied heavily on borrowing.

It was unclear whether Schwarzenegger, who has repeatedly vowed to reject any budget package that is rooted in borrowing schemes, will support the compromise.

The budget package will come before a vote in both houses of the Legislature as early as tomorrow. If lawmakers approve the spending plan and the governor signs it, the state can again begin paying its bills.

Billions of dollars of scheduled payments to healthcare clinics, day care centers, group homes for the disabled and other government service providers have been withheld in the absence of the budget. Some of the smaller service providers were forced to shut their doors. Others have borrowed from friends and relatives to make payroll, or have asked their employees to work without pay until a budget is passed.

evan.halper@latimes.com