State lawmakers debate budget plans

The state budget is almost three weeks past due, and there's no sign lawmakers are any closer to solving the $15 billion deficit. Democrats want to raise taxes, Republicans want to cut spending, and it seems like no one wants to compromise. But KPCC's Julie Small reports there is one plan that might get both sides to give a little.

Julie Small: As the state budget stands now, spending will be $15 billion above expected revenue. Legislative leaders are debating whether to help close that gap by borrowing two-and-half-billion dollars from pots of money for roads and local government.

California voters passed ballot measures aimed at keeping state lawmakers away from that money. Senate President pro Tem Don Perata says the legislature can do it as long as the money's paid back within three years, plus interest – but he wouldn't advise it.

Senate President pro Tem Don Perata: You know we were decrying people who are abusing their credit cards to pay their mortgage. We'd be doing the same thing. Borrowing and borrowing more to get further and further in debt.

Small: But Assemblyman Roger Niello, the ranking Republican on the Budget Committee, says GOP lawmakers might favor dipping into money for roads and local government.

Assemblyman Roger Niello: Yes. We are willing to consider situations that can bring our spending in line with our revenues.

Small: But Governor Schwarzenegger panned the idea this week, and he admonished legislators for taking so long to negotiate a spending plan.

Governor Arnold Schwarzenegger: We're running late because it is a complicated issue. It's very, very difficult to make the kind of sacrifices that people have to make and to be willing to meet in the middle, because as I always said, that's where the action is. I mean, if you ask one side that you got to make major cuts, then you have to ask the other side, then you come up with extra revenues.

Small: Schwarzenegger says you need more cuts and more revenue. Some of the extra revenue he favors would come from his plan to sell California's future lottery earnings to Wall Street. He calls it "securitizing." Legislators call it "borrowing," and they've said it wouldn't generate any money this fiscal year anyway.

Neither side is banking on that one. Instead, they're still scouring the earth for that elusive middle ground.

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