Republicans oust leader amid strained budget talks |

Republicans oust leader amid strained budget talks

SACRAMENTO ” California Democrats renewed their push Wednesday for the needed vote to pass a plan to fix a multibillion dollar budget deficit after another all-night legislative session failed to break the log jam.

The delicate proposal crafted by Gov. Arnold Schwarzenegger and legislative leaders was dealt a setback after Senate Republicans in a late-night coup ousted their leader over opposition to tax increases.

The leadership change could derail already strained budget talks by requiring the governor and lawmakers to negotiate with a new Republican leader.

The current package containing billions in tax hikes, spending cuts and borrowing took leaders more than three months to put together as California tries to pass a midyear budget fix and avoid fiscal calamity.

Senate leader Darrell Steinberg said his fellow Democrats intend to stay until they secure the remaining Republican vote they need to pass a plan to fix a $42 billion budget deficit through June of 2010.

“The budget framework is the budget framework we negotiated for about three months and no change in leadership in the midst of it is going to change that,” Steinberg told The Associated Press before Democrats called lawmakers back into the chamber about 7 a.m. “We just continue to press forward to secure one vote to end this crisis in California.”

Steinberg said he and Assembly Speaker Karen Bass, D-Los Angeles, planned to meet the with the governor later Wednesday morning.

Republicans replaced Sen. Dave Cogdill of Modesto with Sen. Dennis Hollingsworth of Murietta, whom they saw as more capable of resisting tax increases. Before he was elected, Hollingsworth had told Steinberg during a pointed floor exchange Monday that Republicans weren’t going to let Democrats take from people’s pocketbooks.

“I don’t want to see a tax increase passed,” Hollingsworth said Wednesday shortly after assuming the leadership post. “I think the majority of my caucus doesn’t want to see a tax increase passed in the package. We’ll see what happens in the next few hours, next few days.”

Assembly Republican leader Mike Villines of Clovis, who helped negotiate the budget deal, said he looked forward to working with Hollingsworth.

The pressure on California lawmakers to pass a spending package has intensified during the budget impasse. Layoff notices went out Tuesday to state agencies and hundreds of public works projects were on the brink of losing state funding.

At stake is the financial stability of the nation’s most populous state. Tax revenues have plunged by billions of dollars as the recession clobbers California, leaving the state without sufficient cash to pay its bills.

Lawmakers took up the budget vote just before 1 a.m., but it still didn’t have the votes. Steinberg confined members to the Capitol where many of them spent the night sleeping on their office couches. A cot was brought in for Steinberg. Several Democrats rotated onto the Senate floor throughout the early hours of the morning to keep vigil.

The budget was failing by more than just the usually necessary three GOP votes as Sen. Lou Correa, D-Santa Ana, a moderate, abstained. Another senator, Lois Wolk, D-Davis, was ill and had to be called in to cast her “aye” vote.

Cogdill, who served just 10 months representing a caucus that has grown increasingly conservative over the years, said he negotiated a spending cap long sought by Republicans.

“I did the best job I could,” said Cogdill, who was applauded on the Senate floor after he was removed. “I felt sincerely when we took the budget to the floor the votes were there. Obviously, that wasn’t the case. But that wasn’t my belief when the budget went to the floor.”

The remedy offered by the governor and legislative leaders is to reopen the budget in the middle of the fiscal year, enact deep cuts and tax increases, and work out a fix that will cover the state’s spending through June 2010.

The tax increases contained in the current legislative package, worth some $14.4 billion, are proving to be a near insurmountable hurdle to sealing the deal. The state Assembly appears to have the votes to pass the budget plan, but it is snagged in the Senate, where Republicans have refused to support new taxes.

Sen. Jeff Denham, R-Atwater, said Hollingsworth will likely ask to re-examine California’s current spending plan and seek a midyear fix, rather than two fiscal years.

The overnight session followed a frustrating holiday weekend that failed to yield a compromise, despite a previous all-night session that kept lawmakers in the capitol over Valentine’s Day and others that churned into the evening.

Despite attempts at backroom deal-cutting, legislative leaders have been unable to find one additional Republican in the Senate to pass the budget plan.

California’s two-thirds vote requirement to pass a budget requires all Democrats and three Republicans in each house to support the plan.

Two of the Senate’s GOP votes are thought to come from Cogdill and Sen. Roy Ashburn of Bakersfield. As the stalemate wore on, attention focused on two other Republicans, Sen. Abel Maldonado of Santa Maria and Sen. Dave Cox, from the Sacramento suburb of Fair Oaks.

Cox has said he would not support the package in its current form and it was not clear if anything could change his mind, although he abstained from the latest budget vote early Wednesday morning. Maldonado also opposes it but says he’s holding out for Democrats to add his long-sought agenda of government reform measures.

Cox, Maldonado and Ashburn abstained from voting on the new leader, as did Cogdill. Maldonado said Cogdill’s ouster was likely to be bad for negotiations.

“I just can’t believe in the middle of the night we would oust our leader,” Maldonado said. “I didn’t support Dave Cogdill for leader, but I didn’t vote to vote him out today. It’s the wrong time to make a change in the process.”

The proposal before lawmakers was negotiated by Schwarzenegger and the four legislative leaders ” two from each party.

It includes $15.1 billion in program cuts, including more than $8 billion to education, $14.4 billion in temporary tax increases, $11.4 billion in borrowing and several steps intended to stimulate the economy.

It also would send five ballot measures to voters in a special election to be held May 19: a spending cap; a plan to sell bonds based on future lottery proceeds; and approval to shift money from accounts for mental health and child-development programs.

The tax hikes include an increase of 1 cent on the dollar in the state sales tax, a 12-cent-a-gallon hike in the gasoline tax and a boost in vehicle licensing fees.

The measure also includes a one-time, 5-percent income tax surcharge for taxpayers who owe money to the state at the end of 2009. The surcharge would drop to 2.5 percent if California gets its expected share of money from the federal stimulus bill.

Many of the tax hikes would remain in effect through the 2013-14 fiscal year if voters approve a cap on state spending during the May special election.

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