Politics

SACRAMENTO (AP) ― Gov. Arnold Schwarzenegger sharpened his attack Wednesday against his fellow Republicans as he declared that California's budget shortfall has grown to $14.8 billion for the current fiscal year several billion more than the shortfall legislators already have been unable to solve.

"We are heading towards a financial Armageddon. We can already see it coming," Schwarzenegger said.

The governor said the state deficit will get even worse in the 2009-10 budget; an administration official said the gap could be as high as $40 billion over the next 18 months.

A clearly frustrated Schwarzenegger called on legislative leaders to meet this week, calling the state Legislature's failure to act so far a "shameful performance."

The governor declared a fiscal emergency last month and called a special session of the new Legislature to address the growing gap, after a previous special session failed to solve the problem. The deficit for the fiscal year that ends this June then was estimated at $11.2 billion.

"What is amazing about all of this is that the Legislature acts as if we have $30 billion of surplus," the governor said. "They met, they debated, they postured and they did nothing."

Schwarzenegger had proposed $4.7 billion in tax increases and $4.4 billion in program cuts, as well as an economic stimulus plan, as a starting point for negotiations back on Nov. 5 when he declared the first special session for the fiscal year.

So far, Democrats and Republicans have been unable to reach consensus on how to close the gap. Schwarzenegger said if he had the authority, he would lock lawmakers in the state Capitol until they work out a deal.

Republicans have remained steadfastly against raising taxes, rejecting a Democratic proposal for $8.1 billion in cuts and $8.1 billion in tax increases. They have failed to present their own plan, but promised to release a package next week that is expected to contain spending cuts, a cap on future spending and relaxing labor and environmental regulations.

During a Tuesday ceremony honoring state workers who perform heroic acts, Schwarzenegger took a swipe at lawmakers, saying he wished legislators displayed the same "examples of service and selflessness."

That day Assembly Speaker Karen Bass, D-Los Angeles, left for Washington, D.C., to appeal to the incoming administration of President-elect Barack Obama for federal assistance for California. Assembly Minority Leader Mike Villines, R-Clovis, was also there Wednesday.

Bass was scheduled to return to California Wednesday but Villines' press secretary, Jennifer Gibbons, said she didn't know if the GOP leader would cut his trip short by a day to return and negotiate.

Schwarzenegger was especially critical of his fellow Republican lawmakers for their hard-line stance, and said GOP leaders have come unprepared to meetings, making it hard for Democrats to negotiate. He said Republican leaders' generic comments that they would consider talking about revenues do not go far enough.

"That is not the way to negotiate," Schwarzenegger said. "You have to say this is what it takes and then I'm ready to increase the revenues."

Republican leaders said they have offered proposals publicly and privately, including tax credits for businesses, greater flexibility on work hours and postponing greenhouse gas regulations. This week they suggested cutting certain social programs such as the state's health insurance program for the poor, in-home support for seniors and the disabled, care for the developmentally disabled and the state court system.

But they have not offered a detailed proposal that adds up to $14.8 billion.

"They may not like what we say, but they know full well what we have proposed," Villines said in a prepared statement.

Senate Minority Leader Dave Cogdill, R-Fresno, said in a prepared statement that the best solution is to cut spending and stimulate the economy.

"Republicans have been working for years to stimulate the economy," Cogdill said. "Now we've been told that unless we support tax increases, which would harm the economy, the Legislature will not consider enacting these commonsense reforms."

The state treasurer, controller, nonpartisan legislative analyst and the governor's finance director addressed a rare joint session of the state Legislature Monday to warn lawmakers about the dire consequences of doing nothing. State Controller John Chiang has said California could run out of operating cash by February and state Treasurer Bill Lockyer warned the state would stop financing $5 billion in infrastructure projects in two weeks.

"There is too much at stake for Californians if we delay thousands of high-wage jobs will be lost because of unallocated infrastructure bonds if we don't fix this problem," Senate President Pro Tem Darrell Steinberg, D-Sacramento, said in a statement Wednesday.

The governor unveiled a large deficit clock counting the number of days 35 as of Wednesday that the Legislature has failed to act since he declared the first special session for the current the fiscal year. Schwarzenegger said the clock would be placed outside his Capitol office.

The clock tracks how much state taxpayers are losing as the stalemate drags on: more than $1 billion a month that amounts to $470 every second, $28,000 every minute, $1.7 million every hour, and $40 million every day.

Schwarzenegger said some people might call the clock a gimmick to persuade Republican lawmakers to consider increasing taxes. But he said he wants to put public pressure on the legislators.

"They've got to get going and they've got to start negotiating and take this seriously, rather than playing chicken," the governor said.

Schwarzenegger said he wanted a meeting with legislative leaders in the state Capitol Thursday and said he also plans to meet with individual lawmakers. He said he is willing to work through Christmas if that's what it takes to reach a deal.

"There would be no better Christmas gift for the people of California than for us to solve this crisis," he said.

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