Gov. Takes Budget Case to Voters

SACRAMENTO —  Budget negotiations gave way to politicking Wednesday as the governor put pressure on lawmakers in San Diego and Democrats shot back on the floor of the state Senate. Even so, there were hints a deal might not be far off.

In a visit to a Cheesecake Factory restaurant, Gov. Arnold Schwarzenegger told voters he was “very optimistic” that the stalemate would end this week so that “we can pass this budget once and for all.”

Other key players were not so sure.

“If he’s optimistic, he may know more than I do, and that’s good,” said Senate President Pro Tem John Burton (D-San Francisco). “I’d rather have him optimistic than pessimistic. If he’s optimistic, it’s good sign.”

For lawmakers, Wednesday produced few other signs that an agreement on the state’s $103-billion budget -- now three weeks overdue -- was imminent.

Late in the afternoon, Assembly leaders met with the governor after his return from San Diego and hoped to make progress.

But later they said a tentative agreement had collapsed over how to solve a labor law dispute at the center of the stalemate

The law requires school districts to pay their bus drivers union-scale wages. The two sides are trying to draft a bill that would give schools more hiring flexibility but would require them to pay the prevailing wage in their geographic area.

The setback came only hours after the Senate defeated an effort by Democrats to put up their own version of the budget for a vote. As expected, 24 of 25 Democrats voted for it, with Sen. Debra Bowen (D-Marina del Rey) voting against it.

The budget got no GOP support. The vote was intended to make Republicans look responsible for holding up the budget as the stalemate dragged on.

“Left to our own devices, we will fall into our historically bad and unproductive ways,” Sen. Jim Brulte (R-Rancho Cucamonga) said of the vote. “This is a political drill. This is all about posturing, and we really ought to stop.”

Democrats said their plan represented agreements they had reached with the administration in budget talks.

“You may consider it a drill,” Burton said. “We consider it a budget that by and large reflects agreements with this governor.”

The administration distanced itself from that budget, which has significantly more spending for social services and higher education than the draft budget the governor submitted in May.

“I wish to make it clear that there has been no comprehensive agreement between the governor and the leaders,” state Director of Finance Donna Arduin said in a statement read aloud on the floor of the upper house by Republican Senate Leader Dick Ackerman of Irvine. “Absent such an agreement, the governor made it clear last week that the budget plan he supports is the May revision that he sent to the Legislature 10 weeks ago.”

The statement annoyed Democrats, who suggested that Schwarzenegger and his staff were double dealing.

“We thought we had a deal with the governor,” said Sen. Richard Alarcon (D-Sun Valley). “Next thing we know, there was no deal.... Trying to figure out where the governor stands on any particular issue is like trying to catch a butterfly with a toothpick. We can’t get it done at the Cheesecake Factory; we can only get it done in Sacramento.”

The budget remains hung up over a few relatively small issues. In addition to the law related to how schools pay bus drivers, Republicans are calling for repeal of a law that makes it easier for employees to sue their bosses over labor violations.

Democrats agreed -- in theory -- to change the laws to meet some of the Republican demands. But GOP lawmakers said the changes the Democrats had agreed to so far were only superficial.

Both sides are, however, optimistic that they can broker a compromise on how to protect cities and counties from future budget cuts.

It’s an issue over which budget negotiations initially collapsed when a deal looked close earlier in the month.

During the Cheesecake Factory visit, Schwarzenegger called on voters to pressure lawmakers to adopt a budget that was closer to the one he presented in May.

He then addressed a crowd of dozens of spectators sprinkled with protesters.

The governor’s message was not as combative as it was last weekend, when he called opponents “girlie men” for, he said, bowing to “special interests.” But Schwarzenegger made plain that lawmakers who rejected his budget would face retaliation at the polls.

“Call your legislators and tell them to pass the governor’s budget or else you’re out on Nov. 2, election day,” the governor said, passing out pamphlets with the names and phone numbers of local lawmakers -- both Republican and Democratic.

Schwarzenegger was much criticized for the harsh tone of his weekend appearances. At the restaurant, though, he credited his tough rhetoric with reviving budget talks he said had stalled.

“I want to tell you that because of the pressure that has been put on the legislators this week, they’re all back again, Democrats and Republicans,” the governor said. “They’re negotiating again. They’re working together in a bipartisan way.”

Democrats have a different view. They say that they have been trying to get a budget approved all along and that the weekend events only threw negotiations off track after a deal was close last week.

“Going back and forth between trying to work in a cooperative manner and threatening to defeat members at the polls is counterproductive,” said Assemblywoman Christine Kehoe (D-San Diego), who represents the district Schwarzenegger visited. “After a while, you don’t know what to believe. The strategy is getting old.”

In the hours after the visit, Kehoe said, her office received five calls from constituents: three backing the governor; two urging her to “hang tough.”

The restaurant appearance was carefully staged. Many diners on the patio facing TV cameras had been selected: invited guests, Republicans, friends of Schwarzenegger’s advance team, employees of the Cheesecake Factory.

But protesters in the outlying crowd caught the governor’s attention. Some were school union officials who wanted to block Schwarzenegger’s attempt to repeal the law on bus drivers’ wages.

The governor described the protesters as “special interests” and made them the butt of his speech, repeating four times: “Boo to the special interests!”

Schwarzenegger avoided any digs at legislators. When asked why he called Democrats “girlie men” last weekend, he offered a joking nod to the “Saturday Night Live” skit that gave the phrase pop culture status. “We’re here,” he said, “to pump you up!”

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Times staff writers Gabrielle Banks and Jordan Rau contributed to this report.