Schwarzenegger: No budget til he leaves office?

Gov. Arnold Schwarzenegger caused a stir in the Capitol Monday when he told reporters he wouldn’t sign a budget that didn’t include long-term reforms, even if it means the state goes without a new spending plan until he leaves office in January.

Schwarzenegger at first said he thought the state was “weeks away” from getting a budget because it would take that long to reach agreements on changes to public employee pension formulas, state budget rules and the tax system.

Then he added: “If I don’t get all of the things that we need in order to be fiscally responsible and to make the changes, the tax reforms, the budget reforms and the pension reforms, I will not sign a budget and it could actually drag out until the next governor gets into office.”

When a reporter questioned how the state could go that long without a budget, Schwarzenegger replied:

“It will be interesting, but I think that — I think that I, we, try to do everything we can do have a budget as quickly as possible. But at the same time I don’t want to hand this problem and this burden over to the next governor, so I am absolutely committed that I will not sign a budget if we don’t have all of those reforms in place and to do a budget that is fiscally responsible.”

Senate Leader Darrell Steinberg reacted harshly to the threat and issued one of his own. The Sacramento Democrat said his party was willing to wait for the next governor if that is what it takes to delay a set of business tax breaks approved in recent budget deals but not yet in effect.

“If the Governor continues to insist on granting billions in corporate tax cuts financed by drastic cuts to public education and programs for working mothers and their children, I am prepared to grant his wish by waiting for the next Governor,” Steinberg said in a statement released by his office.

State Controller John Chiang also jumped into the fray, reminding lawmakers and the governor that the state will run out of cash by October if no new budget is in place.

In that case, Chiang said, he would begin issuing IOUs by August or September in order to conserve cash to pay bills mandatged by the state Constitution and federal law.

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