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Crunch time approaches to strike budget deal in California

By Judy Lin

Associated Press

Published: Sunday, March 13 2011 10:55 p.m. MDT

FILE -- In this March 10, 2011 file photo Assembly Speaker John Perez, D-Los Angeles, talks with reporters after meeting with Gov. Jerry Brown to discuss the state budget at the Capitol in Sacramento, Calif. Perez and Senate President Pro Tem Darrell Steinberg, D-Sacamento, have scheduled legilsative sessions this week to vote on Brown's budget plan that includes calling a for a special election in June so voters can decide whether to extend tax increases.

Rich Pedroncelli,File, Associated Press

SACRAMENTO, Calif. — Efforts by Gov. Jerry Brown and Democratic lawmakers to court a handful of Republican lawmakers are expected to intensify this week as they seek to compromise on a plan to send a tax vote to the ballot.

A five-year extension of the sales, personal income and vehicle taxes enacted two years ago is the cornerstone of Brown's plan to address a $26.6 billion deficit, but he has been unable to get Republican lawmakers to support it publicly. He is negotiating with some, who have said they want pension reforms, a spending cap and regulatory changes in exchange for their vote on a budget.

Senate President Pro Tem Darrell Steinberg, D-Sacramento, is aiming for a floor vote this week even though Republicans have made no commitment to a timeline for striking a deal. Brown, who already missed a self-imposed budget deadline last Thursday, is seeking bipartisan support to call a June special election to consider extending the tax hikes, which will expire by July 1.

Brown's office wants the election held June 7 to coincide with local elections in many California cities. To do so, he needs to get the Legislature to approve the tax extension question on a bipartisan vote soon.

He also faces a Monday deadline to call a special election to replace former Democratic Rep. Jane Harman, who resigned her Los Angeles-area seat last month.

The Democratic governor is balancing his proposal to extend the tax increases with $12.5 billion in spending cuts. He also wants to save money by shifting more responsibilities to local governments.

Five Republican senators — Tom Berryhill of Modesto, Sam Blakeslee of San Luis Obispo, Anthony Cannella of Ceres, Bill Emmerson of Hemet and Tom Harman of Huntington Beach — are negotiating with Brown.

"We continue to work, and we hope that the governor continues to work with his stakeholders to bring them to a position where we can find some common ground," said Joe Justin, a spokesman for the five senators.

Both the Assembly and Senate were placed on call throughout the weekend, requiring lawmakers to stay within a few hours of the Capitol.

As negotiations progress, Democratic lawmakers are feeling pressure from supporters who cautioned them not to give away too much to the minority party.

Environmental groups last week warned against weakening the California Environmental Quality Act, which requires state and local agencies to identify significant environmental impacts on projects.

"We are most concerned that the state's dire fiscal condition will encourage detractors of our environmental programs to propose concessions to weaken CEQA and other environmental protections during the budget process," wrote Warner Chabot, chief executive of the California League of Conservation Voters. "We urge you to insist that any proposals that reform regulations or undermine our cornerstone environmental protections be assigned to the appropriate policy or budget subcommittees for full and open discussion and action."

State Treasurer Bill Lockyer, a fellow Democrat, also criticized a recent state auditing agency report that proposed freezing pension benefits for current state workers, one of the reforms being sought by the five Senate Republicans. The Little Hoover Commission recommended a hybrid pension system that would include something similar to the 401(k) plans offered to most private-sector employees.

Lockyer said the commission's report ignored reforms adopted by the California Public Employees' Retirement System as part of the previous budget negotiated under former Gov. Arnold Schwarzenegger, a Republican.

"The reforms increased all workers' contributions, and lowered benefits and raised retirement ages for new workers," the treasurer wrote. "Those reforms will save the state an estimated $10.7 billion to $13.5 billion through 2040, according to a CalPERS analysis."

On the other side, Republican senators who are talking with the governor were being pressured not to negotiate. The Howard Jarvis Taxpayers Association, an anti-tax advocacy group, urged its supporters to contact the five senators to "hold the line against more taxes."

"This would be a disaster for taxpayers because Brown's government employee union allies are prepared to spend tens of millions of dollars on a campaign to fool voters into approving the largest tax increase in state history," the association wrote in an e-mail to supporters.

Meanwhile, Brown continues his coalition building. He announced on Friday conditional support from two dozen California agricultural groups, who indicated they would like to see a budget compromise. He added them to a growing list of groups that generally support his plan, including those representing businesses and law enforcement.

"This budget situation is such a wreck; no one can afford to sit on the sidelines," said Frank Rehermann of the California Rice Industry Association in a statement released by the governor's office.

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