Governor, Lawmakers Continue Work on California Budget

Today, Gov. Arnold Schwarzenegger (R) will meet with Senate President Pro Tempore Darrell Steinberg (D-Sacramento) and Assembly Speaker Karen Bass (D-Los Angeles) to continue negotiations on a budget deal to help close the $42 billion deficit projected by June 2010, the AP/San Diego Union-Tribune reports  (Lin, AP/San Diego Union-Tribune, 12/22).

Last week, the Legislature approved an $18 billion budget proposal that included $7.3 billion in cuts to health care, schools and other programs.

Schwarzenegger last week said that he would reject the Democrats' plan because it did not include all of his proposals for an economic stimulus package and did not go far enough to reduce spending (California Healthline, 12/22).

On Monday, the governor said he and Democratic leaders were making progress on a budget deal. Schwarzenegger said he hopes to reach an agreement on the budget by Christmas (AP/Stockton News Record, 12/22).

However, later in the day, legislative leaders criticized Schwarzenegger and suggested that work on the budget would be put on hold until next year.

The governor's Communications Director Matt David said that neither party has been willing to compromise on the budget (AP/San Diego Union-Tribune, 12/22).

Warning From State Controller

Meanwhile, state Controller John Chiang (D) on Monday sent a letter to the governor and Legislature warning that the state will run out of cash in less than 70 days (Calvey, San Francisco Business Times, 12/22).

Chiang said that if lawmakers fail to pass a budget, the state will have to defer billions of dollars in payments or issue IOUs to state contractors. He added that the state would be unable to pay vendors, including those who provide nursing care to seniors (AP/San Diego Union-Tribune, 12/22).