SACRAMENTO — The Legislature voted Friday to send Gov. Arnold Schwarzenegger the final measures needed to resolve the budget deadlock that had dragged on a record 81 days past the start of the fiscal year.
The spending plan, with $104.3 billion in the general fund, allots more to education and social services than last year, but not enough to avoid cutbacks in schools, healthcare facilities and payments to the disabled, elderly and blind. It includes no new taxes; Republicans rejected assertions from Democrats and Schwarzenegger that the state needs to raise more revenue to ensure long-term fiscal stability.
"It's not a good budget," said Senate President Pro Tem Don Perata (D-Oakland). "What was possible today was to make sure that thousands of people would not continue to be hurt" for lack of state payments to hospitals, nursing homes and other social services.
Both the state Senate and Assembly approved the final measures without debate, highlighting the degree to which the year's protracted wrangling has exhausted legislators. They had passed most of the spending plan Tuesday, but Schwarzenegger said he would veto it unless lawmakers altered it.
Legislators agreed to place new restrictions on tapping the state's rainy day fund except when California does not have enough money to maintain its spending plan. They also agreed to Schwarzenegger's demand that they eliminate a proposal to raise $1.6 billion by increasing Californians' withholding taxes -- a measure that legislative officials said was first proposed by the governor's own fiscal experts.
To replace that revenue, the new budget would double the penalty for companies that are late in paying $1 million or more in state taxes.
"Nobody is proud to have had a record-setting budget," said Assembly Republican Leader Mike Villines ofClovis. "We cannot be late like this ever again."
He said the delay could have been averted if Democrats had accepted earlier on that GOP members would not support any tax increases.
Schwarzenegger plans to sign the budget early next week, once he has had a chance to review thousands of spending items and decide which ones to remove. His line-item deletions are expected to bolster the $826-million reserve specified in the budget.
