State budget update: Still no budget as Senate Republicans stand firm

Analysis from CSBA's Governmental Relations Department

As last week drew to close, it looked like a budget might be on the horizon; one week later, however, the landscape has changed. Republicans in the Senate appear to be standing together and holding their ground, insisting that they will not pass a budget that doesn’t reduce the operating deficit. This was what they were holding out for last Friday as the Senate took up the budget that was passed by the Assembly in early morning hours.

By Saturday morning an impasse was apparent and, after 19 hours in session, an exasperated President pro Tem Don Perata adjourned the Senate until Wednesday. Despite the overnight session, the Senate was unable to get two Republicans to side with the Democrats and approve the budget. Senate Republicans were given time to produce a budget that accomplished their goals and had enough support to garner the necessary two-thirds vote.

This week started with the war of words between Sen. Perata and Senate Republican Leader Dick Ackerman. Troubles began over what would be expected of the Republicans when the Senate reconvened on Wednesday morning. Perata stated his expectations in a letter that included a call for the Republicans to present a budget that had the full support of the Senate Republican Caucus plus the additional 12 votes from Democrats that would be needed for passage. Ackerman countered that there was no agreement to do so, only that the Republicans would provide a budget that had a zero operating deficit.

The Senate did reconvene on Wednesday, only to quickly recess so that Perata could review a Republican proposal that included hits to a variety of programs, including welfare.

It appears the proposal would spare K-12 education and maintain the same level of education funding provided by the Assembly, including the minimum Proposition 98 guarantee, but it would also use some risky one-time fund transfers to backfill funding for home-to-school transportation. The Education Coalition held a series of media events this week to urge passage of the budget. The events largely targeted Senator Jeff Denham, a moderate Republican who in the past has been relied on to provide one of the Republican votes needed to adopt a state budget.

By Thursday, the Senate didn’t appear any closer to accepting or rejecting the proposal and remained on call. The rhetoric on both sides continued to gain headlines, with Perata calling the Republicans “terrorists” and later apologizing, and the Republicans heating up the blogs with posts from senators commenting on the budget and their solidarity.

Perata also appealed to Gov. Arnold Schwarzenegger, who has remained mostly uninvolved throughout the budget process, to provide some leadership. Schwarzenegger did hold a press conference on Thursday afternoon, saying it was time the state had a budget and urging the Senate to pass a revenue and spending plan. He also reminded Republicans of his power to “blue pencil” items from the budget to hold down spending. However, the governor doesn’t appear to have a strong influence over other Republicans.

At this point, Perata and Ackerman are reportedly continuing to meet and negotiate. However, final resolution of the budget dispute is complicated by the fact that the Assembly adjourned for its summer recess after passing its version of the budget and trailer bills that included some controversial issues. With the Assembly in adjournment, and Assembly Speaker Fabian Núñez vowing not to return to Sacramento, it is uncertain what would happen if the Senate passed a budget that differs from the other house’s.