Impasse on California budget ends

SACRAMENTO, Calif. – The California Legislature approved a state budget Friday after ceding to Gov. Arnold Schwarzenegger’s demands for financial reform and winning his approval for the plan, which will end the state’s record three-month stalemate.

The $143 billion budget plan will allow the nation’s most populous state to resume payments to schools, medical clinics, day care centers and state vendors that haven’t been paid since July 1, the start of the fiscal year. Legislators had to bridge a $15.2 billion budget deficit.

Schwarzenegger, a Republican, said he was pleased that leaders of the Democratic-controlled Legislature agreed to stronger controls on the state’s rainy day fund and gave him the authority to make spending cuts during the year. But he added that he wanted more reforms to prevent the state from spending more than it takes in.

He said he could sign the package as early as Monday, though there might not be much fanfare.

“There’s nothing to really celebrate,” the governor said at a news conference Friday. “As I said, great things were accomplished, but there are certain things that were not accomplished,” he said.

Senate President Pro Tem Don Perata, one of the lead negotiators, said state finances will only get tougher as partisan ideology dominates the Legislature.

“I don’t know what the governor does next year, but he’s got a much bigger problem,” said Perata, whose term ends in November. “He’s right: We just kicked the can down the street. I don’t understand how he’s going to get any Republican votes next year for a tax increase.”