Still No Budget Deal In California

California still doesn't have a budget. That's despite dire warnings that layoffs, spending freezes and a major meltdown of most state government functions are imminent. Republicans aren't going along with a plan to close the state's $40 billion budget gap. The deal is still a single Republican vote shy of passing.

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ARI SHAPIRO, host:

This is MORNING EDITION from NPR News. I'm Ari Shapiro.

STEVE INSKEEP, host:

And I'm Steve Inskeep. Good morning.

California lawmakers met until the early hours of this morning but failed to adopt a plan to close California's budget gap. This is a story we've been following all night and will continue to follow for quite some time more. The budget gap exceeds $40 billion just for this one state. Among state Senate Republicans the debate became so contentious that they ousted their leader. He'd helped craft a budget proposal that most of his fellow Republicans oppose. After days of marathon sessions, the budget remains one Republican vote shy of passing. We have more this morning from NPR's Ina Jaffe.

INA JAFFE: That one Republican vote is needed in the Senate. And it's still nowhere in sight. The leadership tried old-fashioned horse trading, tried locking senators in the chamber overnight. And Senator Darrell Steinberg, leader of the majority Democrats, tried just plain begging his Republican colleagues.

Senator DARREL STEINBERG (Democrat, Sacramento): And I wish to God that you could deviate just a little bit, just a little but from your philosophy, just a little bit from the endless mantra of no new revenue, no new revenue ever.

JAFFE: And there's a lot of new revenue in this budget deal, roughly $14 billion of increases in personal income taxes, gas taxes, car taxes and sales taxes. There are comparable cuts in services. But that's not what's worrying Republican lawmakers.

Senator SAM AANESTAD (Republican, 4th Senate District): I just think that raising taxes on the average Californian is exactly the wrong-headed way to go.

JAFFE: Says state Senator Sam Aanestad, who represents the Northeastern corner of the state. Like all of the GOP lawmakers in Sacramento, Aanestad has signed a pledge to never raise taxes.

Senator AANESTAD: Unless it's, you know, an extreme emergency such as, you know, earthquakes and the Bay Bridge is collapsing, etc.

JAFFE: The Republicans have gotten a lot of encouragement and a lot of threats to help them stick to their anti-tax pledge. One conservative blogger said that any GOP lawmaker who votes for the budget should be censured at the upcoming California Republican convention. And talk radio has been all over the budget story.

Unidentified Man (Radio Host): These cowardly, slimy, deceitful (bleep) are going to rape you for $70 billion.

JAFFE: That's "The John and Ken Show" on KFI in Los Angeles. Their Web site has a photo feature that shows the heads of a dozen politicians impaled on sticks. All of them are their fellow Republicans.

Unidentified Man: We're going to recall all you (bleep) we don't care if you voted for the tax or not. Doesn't matter. Forget it. You're gone.

JAFFE: Meanwhile, as the state budget standoff has dragged on, the state controller has stopped sending out income tax refunds and suspended payments to the counties for basic social service programs. And if there's not a deal soon, 10,000 state employees could be laid off and hundreds of transportation projects shut down at the cost of another 90,000 jobs. But Senator Sam Aanestad complains that this budget deal doesn't trim enough workers from the state payroll.

Senator AANESTAD: You know, here we are in an economy where major corporations across America, and especially in California, are laying off workers by the thousands. And yet this entire budget proposal does not lay off one California state worker. At a time when private enterprise is trying to tighten their belt, we don't see government making the same gesture.

JAFFE: California is the only large state that requires a two-thirds vote to pass a budget. That's why three Republican votes are needed in each house of the Democrat-dominated legislature. Dan Schnur is the head of the Jess Unruh Institute of Politics at the University of Southern California. He says the Democrats will find that one last elusive Republican vote in the Senate, and probably soon.

Mr. DAN SCHNUR (Jesse M. Unruh Institute of Politics): The question is what else Democrats are able to give up at the risk of angering their constituencies in order to get more Republicans to cross party lines and anger theirs.

JAFFE: And once that budget is passed there will still be plenty of anger to go around, as Californians face painful cuts in services and higher taxes in hard times.

Ina Jaffe, NPR News.

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