The state Assembly has approved a plan to close most of California's $26 billion budget deficit, sending the package of financial fixes to Gov. Arnold Schwarzenegger.
But the Assembly rejected two of the most controversial measures, a plan to take about $1 billion in transportation funding from local governments, and allowing oil drilling off the California coast for the first time in 40 years. That was to have brought in $100 million this fiscal year.
But the approval comes after a long week. The optimism that began when a deal was announced to close California's $26 billion budget deficit gave way Friday to the workaday reality of pushing its many parts through a highly partisan legislature.
The marathon session of debate and voting began about 7 p.m. Thursday and lurched forward into the early morning hours of Friday, as lawmakers found it difficult to agree on some of the more controversial aspects of the budget-balancing agreement.
Finally, at about 6:15 a.m. the the state Senate approved a plan to close California's $26 billion budget deficit, giving the state a glimmer of hope after weeks of fiscal gloom.
The loss of $1.1 billion from the budget package essentially eliminates the $900 million reserve fund Schwarzenegger negotiated with Democrats and Republicans.
That will force him to use his authority to make even deeper cuts to close the gap.
Senators struggled through the early morning hours Friday to get enough votes to pass the more controversial measures, including taking billions of dollars from cities and counties.
The compromise plan before the 80-member Assembly and 40-member state Senate was announced Monday by Gov. Arnold Schwarzenegger and the Democratic and Republican leaders of each house.
It eliminates nearly 60 percent of the with spending cuts to core state services such as education, state parks and prisons.California Senate approves plan to close $26B deficit; legislation now goes to state Assembly.
Throughout the week, the legislative leaders of the Senate and Assembly had said there was much to dislike in the complex legislative package, and indeed there was.
Failure to pass any one of the 31 bills could jeopardize the entire deal, sinking California further into fiscal chaos.
Early Friday, as the Senate was failing to pass a bill seeking to borrow nearly $2 billion from local governments, the Senate leader said he had run out of options for trying to close the state's enormous revenue shortfall.
"I don't know how to find another $1.9 billion, members," Senate President Pro Tem Darrell Steinberg, D-Sacramento, told his fellow lawmakers. "If you think the deal is a bad deal ... then please come forward with the way you would make up $1.9 billion that would gather the political support and the two-thirds vote necessary to avert further catastrophe for this state that we all love."
Perhaps the most controversial measure, allowing an expansion of oil drilling off the Santa Barbara coast, had not been taken up by either house nearly 10 hours after the floor sessions began Thursday night.
In a sign of how tenuous the budget agreement had become, Steinberg said he would miss a Friday morning flight to Hawaii with his family, indicating more time was needed than he originally thought.
Sacramento Mayor Kevin Johnson called the budget deal "a wrecking ball" that will counteract federal economic stimulus efforts and further devastate his city's economy, which is highly dependent on city government.
"We should fight 'til the last minute until the budget is voted on to advocate for ourselves," he said.
The compromise before the 80-member Assembly and 40-member state Senate was announced Monday by Gov. Arnold Schwarzenegger and the Democratic and Republican leaders of each house.