State reaches budget agreement

August 13, 2008 12:00:00 AM PDT
State Senate President Don Perata Wednesday announced that he and Gov. Schwarzenegger have struck a deal to end the state's six week budget standoff.

Perata said Democrats have agreed to Republicans' demands for a spending cap and the governor's plan for a rainy day fund where the state would bank some money during surplus years.

The governor agreed to a temporary one cent sales tax increase to help close the $15 billion deficit.

"We're getting to a point where we are as close as we might get, so we're contemplating bringing the budget to a full boil on the floor and see if we have the votes," Perata said.

California's budget requires a two-thirds majority in both the Senate and Assembly to pass. So, it still needs to be signed off by a handful of republican lawmakers to be made a reality. At least two GOP votes are needed in the senate, six in the assembly.

Related Link:
ABC7 EXTRA: Gov. Schwarzenegger on the budget


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