Democratic Assembly leader rejects California budget cuts

Democratic Assembly Speaker John Perez says California can close its $19 billion budget deficit without making further reductions to state programs.

On Tuesday, the Los Angeles Democrat announced a complex tax and borrowing scheme. His only cut would be a 5 percent reduction in what he referred to as a "staffing fund."

Perez's counterproposal is anchored by a nearly $9 billion loan from the state's beverage recycling fund. The state would pay it back over several years using a new tax he is proposing on companies that extract oil in California.

Perez also wants to delay corporate tax breaks that are scheduled to go into effect next year.

Schwarzenegger's spokesman, Aaron McLear, criticized the plan because it lacked spending cuts and budget reforms.

Copyright 2010 The Associated Press