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US News

CALIF. BUDGET STALEMATE SETS UP FISCAL CALAMITY

SACRAMENTO, Calif. – California lawmakers gathered again Tuesday in another bid to end the state’s multibillion-dollar budget stalemate, as the state was poised to start laying off as many as 20,000 government workers.

After frustrating weekend sessions that failed to break the one-vote impasse preventing them from passing a budget compromise plan to end the crisis, legislative leaders said they planned to put the tax increases in the package up for a vote Tuesday.

In addition to the layoffs, the state planned to halt all remaining public works projects, which would throw nearly 92,000 construction workers out of work. Tax refunds already have been delayed because the state has no money to pay them.

“It is clear there is going to be catastrophic consequences for Californians if we don’t get it done today,” Senate President Pro Tem Darrell Steinberg told reporters Tuesday.

The Sacramento Democrat called a morning session of the Senate, where lawmakers have fallen one vote short of passing the enormous package of spending cuts, tax increases and borrowing.

The chamber recessed shortly after it convened to let the minority Republican members huddle privately to plan their strategy. Under California’s two-thirds vote requirement to pass a budget, passage would require support from all Democrats and three Republicans in each house.

The Senate will remain in continuous session until it passes the budget plan, which is intended to close a $42 billion deficit through June 2010.

Steinberg had warned lawmakers Monday to bring their toothbrushes, saying they would not leave until that one additional vote was secured.

The Assembly had the votes to pass the package but was waiting for the Senate to act. Assembly Speaker Karen Bass urged state employees facing layoffs to call Republican senators and press them to vote for the budget.

“If we don’t pass the budget, the situation is just going to get so much worse,” the Los Angeles Democrat told reporters Tuesday. “One more Republican senator needs to do the right thing.”

Like other states, California faces plunging tax revenue that has imperiled state services.

The compromise proposal put before lawmakers was negotiated by Gov. Arnold Schwarzenegger and the four legislative leaders – two from each party.

The plan includes $15.1 billion in program cuts, $14.4 billion in temporary tax increases and $11.4 billion in borrowing. The package also would send five ballot measures to voters in a special election to be held May 19.

The governor had delayed releasing layoff notices on Friday when it appeared lawmakers would pass the compromise plan.

But after the weekend sessions failed to produce the necessary votes, Schwarzenegger’s spokesman said the administration had no choice. “In the absence of a budget, the governor must do everything he can to cut back on state spending,” spokesman Aaron McLear said.

Despite the warnings of impending fiscal calamity, most rank-and-file Republicans have refused to agree to higher taxes. Republican lawmakers blamed Democrats for years of overspending.

“You’re not going to go back to the people’s pocketbooks to fuel that spending,” said state Sen. Dennis Hollingsworth, R-Temecula.

During a lively floor session Monday night, state Sen. George Runner, R-Lancaster, defended his colleagues’ stance against tax hikes and said his constituents were pleading with him to vote no on the budget proposal.

He accused Democrats, who hold majorities in both houses, of using the recession to drive an agenda of tax increases. “You want this emergency,” Runner said, drawing jeers from Democrats.

Steinberg, the Senate president pro tem, acknowledged that tax increases were difficult for all lawmakers to swallow but said the Legislature has no choice.

“Nobody likes that idea, but remember the reason we are in this crisis is because we are in a national and international crisis,” he said.