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CDCAN

December 23, 2008

With the State budget crisis growing worse each day, Governor Arnold Schwarzenegger, Senate President Pro Tem Darrell Steinberg and Assembly Speaker Karen Bass met December 23 and will meet next on December 26 in hopes of working out a compromise solution

California Budget Crisis:

* Budget Crisis Talks Will Continue Friday
* Governor & Democratic Leaders Hopeful
* Possible Vote On Compromise Next Week

$41 Billion Budget Shortfall and Possible Compromise Proposals Have Major Impact to People With Disabilities, Mental Health Needs, Seniors and Low Income Families - Advocates Worried About Midyear Cuts - And Proposed Budget Coming on January 10th

SACRAMENTO (CDCAN) - With the State budget crisis growing worse each day, Governor Arnold Schwarzenegger, Senate President Pro Tem Darrell Steinberg (Democrat – Sacramento) and Assembly Speaker Karen Bass (Democrat – Los Angeles) met today (December 23) and will meet next on Friday (December 26) in hopes of working out a compromise solution that will help bridge the $41 billion budget shortfall (projected by the end of the 2009-2010 State Budget year that ends June 30, 2010).

Steinberg and Bass said that if a deal was reached, a vote by the Legislature to approve it would probably come sometime early next week. If that happens, the Governor would withdraw his threat to veto the package of 16 different bills passed last week by the Democrats. The Governor announced his intention to veto the bills less than 2 hours after the Legislature passed the measures on a majority vote – though he has not yet actually vetoed any of those bills yet.

Steinberg said the meetings today with the Governor were “positive” and the three leaders were “…all very committed to making an $18 billion dent into this problem before the end of the year. That's our obligation”. He indicated that both he and Bass were willing to work out a compromise solution with the Governor that would address many of his concerns. He did not offer any specifics or other details.

No official announcements were made on what specific progress has been made, but the Governor and the two top Legislative Democratic leaders said that they were “hopeful” that a deal could be reached that will mean some additional legislation – on top of those already passed, that would include several issues that the Governor said last week were needed in order for him to withdraw his threat of vetoing the entire package of bills proposed and passed by Legislative Democrats. without the need of Republican votes.

The Legislature officially ended the special session Thursday that the Governor called on December 1st, after they passed – over objections of Republicans – a package of bills that would cut the $41 billion projected deficit by $18 billion.

The Legislature currently is not scheduled to return to Sacramento until January 5, 2009 – though they could return as early as this weekend or more likely, early next week before New Year’s Day to approve any additional compromise legislation. Presumably that legislation – like the package of bills passed last week (with one exception) would only need a majority vote – meaning that no Republican votes would be needed if at least a majority of the Democrats in both houses voted for it.

No details available – but advocates are worried

No details ere available on what was discussed today, though last week the Governor said he was not happy with the Democratic plan because it did not go far enough in permanent spending cuts, went too far in raising revenues and did not have what he believed were important provisions that would help the State’s economy – including changes to regulations that would help business.

Disability, senior and low income advocates are worried about more mid-year budget spending cuts beyond what the Democrats agreed to last week.

The package passed last week included over $7.3 billion in spending cuts including reductions to CalWORKS, regional centers and cuts to SSI/SSP – though not to the level that the Governor and Legislative Republicans wanted. Because the Democratic plan was passed on a majority vote – bypassing the need for Republican votes – the bills – if signed by the Governor – won’t take effect until 90 days after he approves it. Other proposed cuts by the Governor and Legislative Republicans to In-Home Supportive Services (IHSS), CAPI (Cash Assistance Program for Immigrants), Medi-Cal and the rollback of SSI/SSP to the lowest level allowed by the federal government were not included in the Democratic plan that was passed. The Democratic plan also included over $9.3 billion in new revenues.

Republican Legislative leaders not involved in meetings

The meetings with the Governor have not included Assembly Republican Leader Mike Villines (Republican – Clovis) or Senate Republican Leader Dave Cogdill (Republican – Fresno).

Villines issued a statement on Monday saying he would refuse to participate in discussions around the Democratic plan that approved revenue increases that he and other Republicans say was done illegally in violation of the State Constitutional requirement of 2/3rds vote in both houses to raise taxes. Democrats say the move was legal, backed by the Legislature’s legal counsel, and was necessary because of the stalemate. The two Republican leaders and also anti-tax supporters say that the courts will overturn the action by the Legislature as a violation of the State Constitution.

The Governor, in a news conference held in Sacramento earlier on Tuesday (December 23) after his meeting with the Democratic leaders, said "I prefer having my Republican friends at the table, and I prefer to get a two-thirds vote. But we do need revenue increases. To save California, I'm forced to negotiate just with the Democrats. This is the situation I am forced in because of lack of participation by the Republicans."

Regarding whether or not the Democratic plan that by-passed the need for any Republican votes, the Republican Governor said he would let others decide – presumably the courts – the legality of such a maneuver.

Governor essued Executive Orders last week

Underscoring the urgency of the budget crisis – and his threatened veto of the Democratic deficit reduction plan, the Governor late on Friday signed three executive orders today addressing the State budget crisis, including a new order that declares a “fiscal emergency” that orders the Legislature back into a new special session. He also issued a third executive order today to prepare state government and state employees for the worsening state budget crisis, including furloughs and lay-offs impacting most state departments and agencies.

The Governor last week warned that the State’s budget situation was growing worse every day and “as we free-fall toward a fiscal Armageddon the Legislature still can't cross the special interests, and do what is right for the state of California. The people and our economy deserve better."