Gov. Arnold Schwarzenegger and legislative leaders said they struck a comprehensive agreement after an intensive five-hour meeting Friday night, signaling an end to California's record-long budget stalemate after 93 days.
Virtually no details were released on how the state plans to bridge a $19 billion deficit, as legislative leaders left the governor's office in the Capitol. Democratic Senate President Pro Tem Darrell Steinberg of Sacramento said all the information would be released during a public hearing Wednesday.
A vote on the compromise plan brokered between the Republican governor and Senate and Assembly leaders of both parties could come as early as Thursday.
"Everyone has worked very, very hard. These are very difficult circumstances in difficult times, not a lot of celebrating, but we all stepped up and did the work we had to do," Steinberg said.
Senate Minority Leader Dennis Hollingsworth of Murrieta said he expected enough support among Republicans to pass the budget on a two-thirds vote. Republicans have stood steadfast against tax increases.
"It's a compromise budget on all sides," Hollingsworth said.
Schwarzenegger did not come out to address reporters. His spokesman Aaron McLear declined to give details but noted the governor has demanded pension and other budgetary reforms all along.
"He will not sign a budget that increases taxes," McLear said. "He still feels exactly the same way."
Throughout the impasse, pension reform has remained one of the biggest sticking points. Schwarzenegger wants the Legislature to roll back public employee benefits, while Democratic lawmakers say the administration should work to reach an agreement with unions through collective bargaining.
The leaders also have disagreed on how to raise money, with Republicans refusing to make concessions on taxes or increased fees, and Democrats calling for a delay of corporate tax breaks approved last year.
Although no details were given, a better-than-bleak economic picture was expected to help shrink the budget gap, along with proceeds from the sale of state office buildings.
A balanced budget is key to the state's financial health.
California, which has the lowest credit rating in the nation, has so far been able to pay most of its bills, but officials warned that won't hold for much longer.
Controller John Chiang has said he may have to issue IOUs for just the third time since the Great Depression if next week passes with no budget. Without a budget, the state stopped paying some employees and vendors, and Chiang said he already owes thousands of state contractors nearly $3 billion.
In addition, an estimated $7 billion in planned public works projects could be in danger if a deal is not reached soon, state Treasurer Bill Lockyer's office has said.
Earlier in the day, lawmakers appeared optimistic that a deal was within reach. Assembly Minority Leader Martin Garrick, R-Solana Beach, told reporters to "look for the white smoke, or the smell of it," as he walked into the meeting.