By AARON C. DAVIS
Associated Press in the Napa Valley Register

Wednesday, August 22, 2007

SACRAMENTO — California lawmakers on Tuesday ended a budget impasse that had dragged on for nearly two months, agreeing to a $145 billion spending plan that eliminates the state’s persistent deficit and addresses the myriad concerns of holdout Republicans.

The deal emerged quickly after the Assembly and Senate failed to agree on a budget late Monday night and ends a stalemate that has lasted more than seven weeks beyond the July 1 start of the fiscal year.

The agreement will free up billions of dollars in payments to a variety of social service agencies that rely on state funding, as well as to community colleges and some education programs.

The deal also allows the Legislature and Gov. Arnold Schwarzenegger to move forward on an ambitious policy agenda that includes sweeping health care reform and a proposal to overhaul California’s massive water-delivery system of reservoirs, pumps and canals.

State Sen. Patricia Wiggins, D-Santa Rosa, who voted for the plan but opposed a Democratic concession regarding a requirement for the state to use “green” construction, expressed relief.

“The budget we passed today was very similar to the budget approved by the Assembly last month — and to the one we almost approved three weeks ago — which means we could have and should have arrived at this point much, much earlier,” Wiggins said in a prepared statement.

“But I am glad that we are putting this impasse behind us, because it will allow us to resume payments to child care facilities, to nursing homes, to health clinics and other providers who receive reimbursements through Medi-Cal, to those who offer care and services to the developmentally disabled, and to anyone else who has been negatively affected by the delay.

“Without raising taxes, this budget fully funds such things as education and law enforcement, it allows us to pay off $2.5 billion of our overall bind debt earlier than scheduled, and keeps a record $3.4 billion in reserve.

“It is my hope that we can move quickly now on other major outstanding issues, especially health care reform, and that we can reach early agreement on the next round of budget talks in 2008.”

State Assemblywoman Noreen Evans, D- Santa Rosa, said in a prepared statement that “the spirit of compromise finally prevailed. It’s time to move onward and upward. With much needed funding finally going out to community colleges, Medi-Cal patients and child care providers, we can focus on health care reform. Millions of uninsured Californians, businesses, and working families are counting on us.”

The budget plan, which had passed the Assembly last month, was approved 27-12 in the Senate with two Republican votes, just meeting the required two-thirds majority. It now goes to the governor, who has said he supports it.

The final deal came together after legislative leaders from both parties agreed on the core budget plan and on a variety of separate demands sought by Republicans. Some of those demands were included in separate bills that were voted on simultaneously with the budget on Tuesday.

At the heart of the Republicans’ objections was a demand that the budget eliminate a $700 million deficit. When Schwarzenegger said he would do so by using his line-item veto power, Senate Republicans said they didn’t believe him and added more demands.

The most contentious issue appeared to have little to do with the state budget.

It arose after Attorney General Jerry Brown, the state’s former Democratic governor, threatened legal action against cities and counties that failed to compensate for increased greenhouse gas emissions caused by local growth and developments.

Republicans have said Brown’s actions would stifle growth throughout California.

An agreement struck Tuesday in the Legislature would impose a moratorium on global warming-related lawsuits. That amendment, voted on separately, attempts to limit legal challenges against transportation and flood-control projects funded with bond money voters approved in November.

Under the amendment, such projects do not have to account for their greenhouse gas emissions under the California Environmental Quality Act until January of 2010.

Brown said it was never his intention to interfere with the bond money approved last year by voters. He blamed Republicans for spreading misconceptions and false information about his lawsuit against San Bernardino County.

Hours before the Legislature approved the budget, Brown was in Los Angeles announcing a settlement of his environmental lawsuit. It requires the inland Southern California county to take steps to reduce the effects of growth on global climate change.

The final budget deal also was helped by Republicans dropping another demand they had issued on Monday — that lawmakers ensure equalization funding for schools. Republicans want to use state money to supplement rural and suburban school districts with declining enrollments, typically ones in their districts.

The two sides said they will address the issue in budget negotiations next year.

The budget includes a $103 billion general fund, which pays for ongoing state operations. The higher budget figure includes special obligation funds and money to repay bonds the state has sold in past years.

This summer’s deadlock was California’s third longest budget impasse during the past 30 years, eclipsed only by stalemates in 1992 and 2002.