(02-19) 07:37 PST Sacramento -- After five days of Capitol arm-twisting, Gov. Arnold Schwarzenegger and Senate Democrats secured a breakthrough GOP vote this morning that gave the necessary two-thirds majority to their plan to save the state from what they warned was impending financial ruin.
The Legislature began voting at 3:40 a.m. on a package of 33 bills to close a $41 billion budget deficit through June 2010 - a record shortfall resulting from a faltering state economy and the collapse of the housing and banking markets. By 6:55 a.m., both houses of the Legislature had passed the plan.
"I'm absolutely delighted about the budget passing and the great job the Legislature has done," said Schwarzenegger moments after the vote. "This is a historic budget."
The governor is expected to sign the bills Friday.
The Senate had been one GOP vote short until Sen. Abel Maldonado, R-Santa Maria (Santa Barbara County), changed his mind to support the budget plan, but only after Schwarzenegger and legislative leaders agreed to his demands.
"I know there will be dire political ramifications for me, but I know the ramifications for the people of California would be more dire (without this budget)," said Maldonado. "This budget is about shared pain and shared sacrifices."
The 33 bills include $15 billion in spending cuts, $11.4 billion in borrowing, $12.8 billion in taxes and about $2 billion of federal funds from the federal stimulus package that President Obama signed on Tuesday.
The tax increases - 1-cent on the dollar sales tax, vehicle license fee and a slight increase in the state income tax - had been the primary reason why the plan could not garner enough Republican support in the Senate to push it over the required two-thirds majority.
Maldonado's demands included the removal of a proposed 12 cents a gallon gasoline tax, suspending hikes in pay and per diems for lawmakers when the state is facing budget deficits, and a ballot measure in June 2010 that asks voters whether they want open primaries.
"It was not easy to decide to support the budget, Maldonado said. "I would have liked to see someone else vote for this budget. But during these difficult times I've decided to step up to the plate."
Also supporting the plan were Republican Senators Roy Ashburn of Bakersfield and Dave Cogdill of Modesto. Cogdill was the Minority Leader ousted Wednesday by his fellow Republican senators because he supported an earlier plan that called for $14.4 billion in tax hikes.
Department of Finance director Mike Genest, said the vote happened "just in the knick of time." He acted quickly to send emails to state agencies this morning telling them not to halt the 276 state funded public works projects that Schwarzenegger ordered stopped because the state was running out of cash.
Before adjourning, Assembly Speaker Karen Bass told legislators: "Members, we all cast some difficult votes today... But we took those votes to prevent the State of California from going off the cliff."
Senate President Pro Tem Darrell Steinberg, D-Sacramento, cautioned after the vote that this was not a time for a celebration.
"It is a time to take great pride in our imperfect institution," Steinberg added. "If we can solve the largest deficit in state history, we can tackle anything."
The Legislature's action came three months after Schwarzenegger declared a fiscal emergency and called on legislators to convene a special session to solve the state's financial crisis. After grueling negotiations and stalled talks, the governor and legislative leaders finally agreed on a compromise plan to close the deficit last week.
The Legislature began voting on the plan late Saturday but stalled when the main budget bill failed to get the required three Republican votes in the Senate. Then-minority leader Cogdill was the lone Republican to vote yes. Afterward, Ashburn agreed to provide the second GOP vote - but only if a third GOP Senator stepped forward.
From that point on, the squeeze was on to find the one final GOP vote. Several times, the whole deal appeared as if it might come undone. On Wednesday, after GOP senators ousted Cogdill, they replaced him with Sen. Dennis Hollingsworth, R-Murrieta (Riverside County), who said he wanted to start from scratch and negotiate a "no-tax-increase budget."
Schwarzenegger said he would not start over.
"I hate taxes," the governor said, adding that the state's shortfall could not be closed without them.
"If you think you can do this budget without any revenue increases then you have a big math problem," Schwarzenegger said Wednesday.
Also Wednesday, U.S. Sen. Barbara Boxer warned that a failure by California's lawmakers to agree on a new spending plan could jeopardize federal stimulus funds for education and transportation. She called the state's $41 billion budget shortfall the "crisis of a lifetime."
Boxer, speaking in Sacramento, said she had a detailed telephone conversation with State Controller John Chiang about the state's latest fiscal picture.
"When I got off the phone with him, my hands were shaking for what lies ahead if we don't get one vote," Boxer said.Source
It's finally over, guys. I really commend the three Republicans who decided to support this budget.