SACRAMENTO, Calif. - Lawmakers on Friday approved a complex package of spending cuts, local government raids and accounting maneuvers to fill California's gigantic budget deficit, providing hope that the state might begin a slow climb out of a deep financial hole.
The legislative package of about 30 bills, with final passage coming in the Assembly in the afternoon after an all-night session, was similar to the deal announced earlier this week by Gov. Arnold Schwarzenegger and legislative leaders from both parties.
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.
The loss of $1.1 billion from the budget package means Schwarzenegger will have to use his authority to make even deeper cuts to close the gap.
But the Assembly cuts do not appear deal-breakers. The Republican governor tweeted after the vote: "Budget passed. Thanks to the legislature for the hard work last night and today. Plan to sign next week."
Assembly Speaker Karen Bass, D-Los Angeles, thanked members for their days of hard work, saying by the time the vote took place "I don't even remember if it's afternoon, evening or night."
At a news conference after the vote, she said the Assembly would work with the governor's office when lawmakers return in August to find ways to make up the lost revenue.
On whether the problem is solved: "We do not exactly know where the economy is going right now."
Revision of Budget
The measures passed by the Legislature technically amounted to a revision of a 2009-10 fiscal year budget that lawmakers passed in February during an emergency session.
Since then, the state's fiscal condition has grown more dire by the week, led by a dramatic drop in personal income tax revenue. The cash crisis has become so acute that California has been forced to send IOUs instead of payments to thousands of state contractors and was facing the prospect of being unable to fund pension contributions and or pay employees by September.
While lawmakers agreed the deficit-closing plan was distasteful, most said they had little choice.
The budget agreement will be felt in nearly every community of the nation's most populous state.
Cuts to public schools are expected to force teacher layoffs, more crowded classrooms and scaled-back offerings in art, music and sports.
College students will pay hundreds of dollars more per year in fees, course offerings will shrink and tens of thousands of prospective students will be turned away.
Welfare, health care programs for low-income families and in-home services for the disabled, elderly and frail will be reduced. Nearly 40,000 will have their in-home support services terminated.
Even state workers, long protected by powerful public employee unions, have been affected. Schwarzenegger has ordered them to take three days off a month without pay, equating to a 14 percent pay cut.
An undetermined number of state parks will close after Labor Day, and the state will be authorized to sell 17 state office buildings to raise cash, renting the space back from the new landlord. The Orange County Fairgrounds also will go on the market.
Associated Press Writers Steve Lawrence, Don Thompson, Juliet Williams and Samantha Young contributed to this report.
Copyright 2009 by The Associated Press. All Rights Reserved.