California Budget Update

After a week of name calling and communication breakdown, the budget negotiators ended this week on their best behavior, with long Big 5 meetings and nebulous promises of progress toward a budget deal.

AP’s Judy Lin reports, “Against a backdrop of IOUs and expanding government furloughs, Gov. Arnold Schwarzenegger and legislative leaders expressed optimism Saturday that they were moving toward a compromise that could end California’s fiscal calamity.

“Negotiations to close the state’s $26.3 billion deficit restarted after two weeks of inaction and partisan bickering. Top lawmakers from both parties said a budget-balancing deal was possible in the coming week.

“I would say we’re getting very close to a general framework, but there are still outlying questions,” said Assembly Minority Leader Sam Blakeslee, a San Luis Obispo Republican, after emerging from a closed-door meeting between lawmakers and Schwarzenegger.

“They negotiated about 2½ hours Saturday before ending talks for the day. Senate Minority Leader Dennis Hollingsworth. Negotiators were expected to return to the Capitol Sunday.”

AP’s Samantha Young reports that despite the progress, a deal remains elusive .

Lawmakers from both parties said Sunday that they had made headway after a weekend of closed-door meetings at the Capitol, but acknowledged a deal remained elusive. It was unclear when legislative leaders would reconvene for talks.

“Lawmakers remained at odds over how to close the budget shortfall despite a consensus that severe spending cuts were inevitable. Schwarzenegger also wanted to seek out waste and abuse in welfare, in-home support and health care programs. The governor’s office has said those reforms could save taxpayers roughly $1.7 billion this fiscal year.

“Over the weekend, lawmakers discussed some of those reforms, as well as proposals to consolidate state agencies to save money and generate revenue by selling state property.

“The biggest test will come in the next few days when lawmakers said they expect to make difficult decisions about cuts to education and welfare. The legislative leaders must also win the buy-in of their respective caucuses once a deal is struck.”

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