Schwarzenegger Says He'll Restart Stalled Budget Talks

January 7, 2009 12:00:00 AM PST
Governor Schwarzenegger said he will restart stalled budget talks in hopes of getting an agreement between state Republicans and Democrats.Saying that it was time to turn the page, Governor Schwarzenegger called on lawmakers to start anew. 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 said it's time for Republicans to get back to the table.

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

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. And 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," said Assembly Member Mike Villines (R) from Clovis.

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 don't own a car wouldn't be hit at all.

Republicans possibly coming around to the tax hikes idea has been something Democrats have been hoping for, even joking about yesterday 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," said Assembly Speaker Karen Bass (D) Los Angeles.

"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 1st ... then we will start sending out IOUs," said Schwarzenegger.

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