California Senate passes budget plan

LOS ANGELES, July 24 (Xinhua) -- California's Senate passed a budget package that would close the state's 26.3-billion-dollar deficit early Friday morning, but the state Assembly is still debating the plan.

The Senate approved the plan after a grueling all-night session, but the Assembly was still struggling to secure enough votes to pass several measures, including three that took or borrowed billions of dollars from cities and counties.

On Monday, Governor Arnold Schwarzenegger announced the compromise plan he reached with the Democratic and Republican leaders of each house.

The plan, which was put before the 80-member Assembly and 40-member state Senate, eliminates nearly 60 percent of the deficit with spending cuts to core state services such as education, state parks and prisons, according to the Los Angeles Times on Friday.

One potential sticking point in the Assembly remains a bill that deals with how schools would be repaid some of the money the state is cutting. Assembly Republicans do not want to approve the version that passed in the Senate, which has now adjourned until August.

Many Democratic lawmakers also criticized a provision authorizing an expansion of oil drilling off the California coast in exchange for royalties, saying it amounted to an end run around the public-review process and would invite legal challenges. The state would receive 100 million dollars in royalties from the company that takes the oil.

If the Assembly does not ratify the same version, the bill can't become law.

Lawmakers in both houses agreed to cut billions of dollars from higher education, courts, grants to college students, healthcare, welfare, and home health aides for the elderly and disabled.

They reorganized state boards and commissions, and required Californians to pay taxes earlier through payroll withholdings.

But not enough Republicans or Democrats in the Assembly were willing to vote to borrow 1.9 billion dollars in property taxes, take local coffers for one billion in transportation funds and seize an additional 1.7 billion from redevelopment agencies.

Cities have threatened to sue over the last provision, and local government officials have protested all of it.

The nation's most populous state has been struggling to close its budget hole that has prompted the issuing of IOUs to thousands of state contractors and vendors.