Legislature fails to approve spending cuts

SACRAMENTO -- Democrats failed to secure a two-thirds majority vote in either the Assembly or Senate Wednesday for their proposal to cut state programs by $11 billion in an effort to close a much larger deficit.

The voting, largely along party lines, increases the pressure on lawmakers as the start of the fiscal year looms July 1 and officials warn of insolvency. State controller John Chiang warned that if legislators and Gov. Arnold Schwarzenegger fail to come up with a budget-balancing package in the next week, he would begin paying California's bills with IOUs on July 2.

Assemblywoman Noreen Evans, D-Santa Rosa, put the onus on Republicans to come up with alternatives.

Democrats need four Republicans in the Assembly and two in the Senate to achieve the two-thirds vote, which is required for legislation to take affect immediately.

Another alternative would be for Democrats to pass their cuts on a majority vote, but according to Evans that would cost the state an additional $500 million in lost savings and increase the risk of "financial meltdown." As a non-urgency measure, the budget cuts could not take effect for at least 90days.

The $11 billion cuts proposed by Democrats represent about half of their proposed package to bridge a $24 billion budget deficit. Governor Arnold Schwarzenegger has proposed an additional $7 billion in cuts.

Democrats also were proposing to raise $1.9 billion additional revenue by raising taxes on cigarettes and a new tax on taking oil out of California. But that Senate President Pro-Tem Darrell Steinberg, D-Sacramento, said odds of getting Republican support for the plan are remote.