Schwarzenegger will restart budget talks

January 7, 2009 8:11:42 PM PST
Saying that it was time to turn the page, Gov. Schwarzenegger called on lawmakers to start anew.

"We have three weeks before we go off the cliff," Schwarzenegger said Wednesday.

It is day 63 of the budget stalemate, and the state's bank account balance is running dangerously low. After weeks of just negotiating exclusively with Democrats, Schwarzenegger says it is time for Republicans to get back to the table.

"To protect California, I think in the end, they will come to an agreement," Schwarzenegger said. "I have faith in them that they will come to an agreement; I just hope that we can turn it around."

The state's cash is so low, the Controller's office is readying for the possibility it will have to issue IOUs to people who are supposed to get state income tax refunds.

The pressure is on even more for lawmakers to avert the crisis.

In a surprise admission, Republican leaders appear to be softening their normally hard-line stance against raising taxes. If other spending restraints are met, there are some taxes they could agree to.

"I don't like any of the taxes on the table; if you're going to raise taxes, it should be in something fair, across-the board, for everybody in one fell swoop," minority leader Assm. Mike Villines said.

Raising the vehicle license fee is an example that fits that definition, because owners of expensive cars would be hit the hardest and those who do not own a car would not be hit at all.

Republicans possibly coming around to the tax hikes idea has been something Democrats have been hoping for, even joking about Tuesday, because the Governor would only need a few convince a few to say 'yes.'

"If he could come to us and say, 'I have three votes in the Senate and three votes in Assembly,' I know we would be delighted," Assembly Speaker Karen Bass said.

"We will do everything we can to continue running everything, but as soon as we need to, we'll start laying off, which will start February 1, then we will start sending out IOUs," Schwarzenegger said.