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What’s Next In Calif. Budget Debate Is Unclear

With 10 days left before California starts a new fiscal year, Democratic and Republican lawmakers on Monday turned to Gov. Jerry Brown for his next move.

What that is, he's not saying.

Lawmakers returned to the Capitol after having little communication with the administration since Brown vetoed a spending plan passed last week by majority Democrats. The governor continues to talk to certain Republicans by telephone as he tries to court four of them to support a special election on tax extensions, Brown spokesman Gil Duran said.

Senate President Pro Tem Darrell Steinberg, D-Sacramento, said he has not spoken to Brown since last week and says no meetings are scheduled. Assemblyman Tom Berryhill, R-Modesto, described it as "silent over the weekend."

Sen. Mark Leno said the governor holds the key to the negotiations because his central budget proposal has not yet received sufficient support and he vetoed the Democrats' proposal.

"What is his plan? We showed ours; he didn't like it. What's his?" said Leno, D-San Francisco.

Brown wants the Legislature to call a special election for later this year so voters can decide whether to extend a series of expiring tax increases for up to five years. So far, he has been unable to get support from the two Republican lawmakers he needs in each house to place a measure on the ballot.

The last of those tax increases expire June 30. After that, any tax proposal would be for new taxes rather than existing ones, putting lawmakers in a politically perilous position.

It's not clear whether Brown has a Plan B, even as time is running out to find compromise.

Democrats passed a spending plan last week to meet the state's June 15 constitutional deadline for the fiscal year that begins July 1. They said they believe that action allows them to continue receiving their paychecks, but state Controller John Chiang will decide whether it meets the language of a voter-approved initiative that halts pay if lawmakers miss their budget deadline.

Brown angered lawmakers from both parties with his swift veto. Democrats complained that he has been unable to persuade Republicans to agree to his special election, while Republicans were miffed that he blamed them for the fiscal impasse. The handful of Republican lawmakers who have been negotiating with Brown say they want pension reforms and a spending cap in return for their support of a special election.

The governor said the Democratic budget plan didn't go far enough. He said he did not want to see "more billions in borrowing, legal maneuvers that are questionable and a budget that will not stand the test of time."

Duran said Monday that Brown will keep pursuing tax extensions because he doesn't want to "just kick the can down the road and paper over the holes."

Brown wants to ask voters to extend for up to five years the increases in the sales, vehicle and personal income taxes enacted in 2009. The higher sales and vehicle taxes expire June 30, while the increased personal income tax rate expired in January.

In the meantime, he wants the Legislature to approve funding that would extend the vehicle and sales tax increases until the special election, which could come as soon as September.

Democrats have majorities in the Assembly and Senate but need at least two Republican votes in each house to pass tax increases or place measures on a ballot.

Some Republicans remain optimistic that the Legislature could work out a compromise by the end of the month.

"Both sides are going to have to sit down and have some conversations, because there's 10 days until a budget needs to be passed. So it's getting down to time to make those decisions," said Sen. Bill Emmerson, R-Hemet.

Emmerson said four Senate Republicans remain willing to put the tax issue before voters based on the reforms they feel are needed to solve the state's long-term problems. But he said he doesn't know if the Legislature's passage and Brown's veto of the budget last week changes the dynamics of the budget discussions.

"That's one I can't answer," he said.

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