Closed-door negotiations aimed at breaking the state's record-long budget impasse had been scheduled for Tuesday afternoon until the governor's office released a message saying that no such meeting would take place.
Schwarzenegger's press secretary, Aaron McLear, and spokesmen for Democratic and Republican leaders insisted negotiations were still continuing, but at the staff level. The leaders will reconvene once the staff works through some of the details, they said.
"We're still moving toward the goal line," said Alicia Trost, spokeswoman for Senate President Pro Tem Darrell Steinberg, a Democrat from Sacramento.
Earlier in the day, McLear said unions were stalling the budget negotiations by trying to block a rollback of pension benefits. It is one of the reforms Schwarzenegger has demanded in exchange for his signature on a budget bill that would close the state's $19 billion deficit.
Steinberg said Monday that Democrats want the Republican governor to win concessions from public employee unions through collective bargaining before they consider his proposals for legislative changes to the pension system.
McLear said legislators should instead act on their own to repeal an 11-year-old law that increased public employee benefits.
"As long as the public employee union bosses are dictating the terms of the budget, we will remain at impasse," McLear said in an interview. "The will hasn't been there to stand up to the public employee unions."
Steinberg spokesman Nathan Barankin denied that union leaders are blocking the budget and accused the governor of trying to find "someone to blame for his inadequacies."
"It's not complicated: The governor and the governor alone is required to negotiate contracts with his employees," Barankin said. "Our view is he should stop blaming others for his inability to do his job, and just get it done."
Democrats are pushing the administration to complete negotiations with the 95,000-member Service Employees International Union, which represents nine of the 15 bargaining units that lack a contract. There were negotiations last week, but no talks are currently scheduled, said Department of Personnel Administration spokeswoman Lynelle Jolley.
SEIU Local 1000 spokesman Jim Zamora declined comment.
The state has been without a budget since the fiscal year began July 1, meaning schools, counties and thousands of state contractors are not getting paid. Without a budget, state Controller John Chiang has said a lack of money may force the state to begin issuing IOUs early next month, as it did last year for just the second time since the Great Depression.
The governor and lawmakers last week announced that they had agreed to what they described as a framework for approving a budget, but no details have been revealed. McLear said that framework remains in place, but it must include pension reforms. He said union leaders are making unspecified "unreasonable demands" that are blocking agreement.
Schwarzenegger also is insisting that legislators agree to tax and budget reforms before he will sign a budget.