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Top GOP Lawmaker Walks Out Of Budget Talks

SACRAMENTO (AP) ― A top Republican lawmaker walked out of budget negotiations Tuesday with Democrats and Gov. Arnold Schwarzenegger, saying he is upset about their plans to raise taxes.

The action by Assembly Minority Leader Mike Villines illustrates the divide between the two parties as they try to strike a budget deal nearly two months after the start of the fiscal year and raises doubts about whether they can find common ground any time soon.

Villines, R-Clovis, abruptly left Tuesday's budget negotiations in the governor's office after about an hour. He said he is tired of being in meetings where the conversation focuses on raising taxes.

Villines likened budget talks to the film "Groundhog Day," in which the main character lives the same day over and over.

"I don't know how many times we're going to say no," Villines said about the tax proposals.

Republicans said they want a spending cap to stop California's deficit spending, while Democrats have proposed a mixture of spending cuts and tax increases on the wealthy and corporations to help bridge the state's $15.2 billion deficit. Schwarzenegger, meanwhile, has floated plans to sell bonds based on the future value of the state lottery and a temporary 1 percent sales tax increase that would be rolled back after three years.

In an interview immediately following the meeting, Schwarzenegger said both sides must move toward the middle. Republicans should be open to new revenue in exchange for getting the kind of budget reform that is difficult for Democrats to accept, he said.

The governor is seeking a mechanism that will rein in state spending by granting the governor authority to make midyear cuts and establish a rainy day fund so the state can cover deficits in lean times.

"I think if you get the kind of reforms that I'm talking about, then it might be a good trade off," Schwarzenegger told The Associated Press.

Assembly Speaker Karen Bass, D-Los Angeles, said Democrats are willing to compromise on how best to solve the state's deficit, but said her party will not accept large cuts that compromise public safety, education and health care.

Schwarzenegger said the election year is making negotiations more difficult, but he said restraining state spending is critical because California is facing a projected $10 billion deficit in the 2009-10 fiscal year, which begins next July 1.

"It's a historic fight that has gone on," the governor said. "What I'm trying to tell them is the only way we can solve the problem is a compromise."

The governor said he would like a deal by week's end so that some kind of long-term budget reform can be included on the November ballot. Schwarzenegger would like to make budget reform the centerpiece of this year's negotiations, but his hopes could be doused if Republicans and Democrats fail to pass an agreement by this Sunday to qualify measures for the ballot.

The Legislature already missed last weekend's deadline to place measures on the general election ballot, but lawmakers have the authority to set a new one. The changes being sought by the governor would require voter approval in November.

Schwarzenegger administration officials said they believe lawmakers can waive an eight-day public notice rule and still make the Sunday deadline. If a deal is reached any later, the state runs the risk of bumping up against deadlines to mail ballot pamphlets to voters.

The longer it takes lawmakers to strike a deal, the more it is expected to cost taxpayers. The secretary of state's office estimated it will cost between $4 million and nearly $12 million to print and mail supplemental ballot pamphlets.

The governor did not rule out calling a special election after November if lawmakers miss the deadline to place a budget reform measure on the ballot.

Legislators are pressed to leave the Capitol in time to attend their national party conventions. The Democratic National Convention will be held Monday through Thursday in Denver, while the Republican National Convention will be held Sept. 1-4 in St Paul, Minn.

Legislative leaders from both parties said their caucuses would remain in Sacramento until a budget deal is reached. Schwarzenegger, who has endorsed Sen. John McCain's presidential bid, said he also would not attend the Republican National Convention if no budget is adopted in time.

"I have all the time in the world to sit here until it's over," said the governor, who is recovering from weekend surgery on his right knee.

(© 2008 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)