updated 7/21/2007 9:10:33 AM ET 2007-07-21T13:10:33

A stubborn disagreement over whether to cut a tiny fraction of California’s $145 billion budget proposal led to a rare legislative lock-down that left state senators stuck in their chamber Saturday.

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The Senate’s leader, a Democrat, took the unusual step after Republicans refused to reconsider their demand for a balanced budget and Democrats said they would agree to no more cuts.

Lawmakers needed permission to exit the chamber. Some slept at their desks, listened to iPods or read. Others huddled on the Capitol balcony drinking wine and beer from plastic cups as the grueling, late-night session churned into Saturday morning.

“If it takes all weekend, it takes all weekend,” said Lynda Gledhill, spokeswoman for Senate President Pro Tem Don Perata, D-Oakland, who ordered the rare legislative lock-down.

'We're moving slowly'
After six months of negotiations, thousands of hours of meetings and an all-night session the previous day in the Assembly, finding the two-thirds majority required to pass the budget in the Senate was proving elusive. Two Republicans were needed to meet that threshold in the Democrat-controlled chamber.

“We’re moving slowly,” Senate Republican leader Dick Ackerman said.

The budget already is long overdue, with the state’s 2007-08 fiscal year having begun July 1. Lawmakers also were scheduled to begin their summer recess on Friday, but late in the evening Perata ordered senators locked in the chamber until they reached a deal.

Toward an agreement?
There appeared to be little negotiating taking place between lawmakers, raising doubts about whether the two sides could agree.

Gov. Arnold Schwarzenegger, after taking a break for a gym workout Friday evening, remained in his Capitol office until shortly after 2 a.m. Saturday, attempting to persuade Republican lawmakers to vote for the plan.

Administration aides complained that Ackerman would not let Republican senators meet with the governor one-on-one.

The departure of Schwarzenegger and his aides all-but-ended any hope for a quick resolution. Top aides to the Senate’s legislative leaders also left the chambers, leaving behind only dozing lawmakers.

Ackerman said Senate Republicans remained unified in their opposition to the spending plan because it doesn’t go far enough to eliminate the state’s operating deficit. The deficit was reduced to about $700 million — about one half of 1 percent of the overall spending plan — in the budget approved by the Assembly.

Even so, Ackerman warned that the proposal threatened to leave California with an unmanageably large budget hole in coming years.

“We’ve been in a budget crisis for the last three or four years, and we’ve been digging ourselves out one year at a time,” he said. “If we don’t do as much as we can now, we will have more serious financial problems than anyone will want to deal with.”

Stagnant job growth
As the Republican leader stood firm, economic data released Friday indicated job growth had stagnated in California. It was the latest in a string of pessimistic economic news. The state also has collected $800 million less than expected in recent months.

Analysts are projecting a state budget deficit of more than $5 billion for the 2008-09 fiscal year.

Schwarzenegger said he supported the budget passed by the Assembly and would not endorse Senate Republicans’ efforts to cut the deficit to zero. Doing so would mean cuts to education, he said in a statement.

In addition to seeking a balanced budget, Republicans insisted on language ensuring the public works bonds that voters approved in November would be spent as expected.

Earlier Friday, Perata called a separate package of tax credits that had been sought by Republicans and passed in the Assembly as a companion to the budget bill “dead on arrival” in the Senate.

The credits would benefit movie studios, high tech firms and other companies, but Perata’s office estimated they would cost the state between $600 million and $1 billion a year in lost revenue.

Republicans said the credits would make California’s tax code more competitive with other states and drive business into California, thereby increasing the state’s tax revenues.

The budget adopted by the Assembly contains about $103 billion in general fund spending, $1 billion less than Schwarzenegger proposed in May. It also reduced the state’s operating deficit from $1.5 billion to $700 million and provided what lawmakers said would be the state’s largest-ever reserve in a single year, $3.4 billion.

It does so largely by shifting $1.3 billion in unexpectedly high gasoline tax revenue to help pay for the state’s operating expenses. Democrats had sought to keep that money in funds for public transit agencies.

© 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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