Schwarzenegger says lawmakers resisting budget plan ‘have math problem’

SACRAMENTO —  As state senators spent a second frustrating day locked inside the Capitol, Democrats and the governor began closing in on a deal with a GOP holdout that had the potential to resolve California’s fiscal emergency.

The agreement would involve Sen. Abel Maldonado of Santa Maria providing the final Republican vote needed to pass a spending plan with billions of dollars in tax hikes in exchange for the Legislature’s rewriting election rules that Maldonado says are stacked against political moderates like himself.

The deal started to gel after seven votes held throughout the day and into the night. Each time, the senators came up short of the support to approve the budget package devised by Gov. Arnold Schwarzenegger and legislative leaders. “We are trying to decipher whether what Abel wants is workable,” said Dean Florez of Shafter, the second most senior Democrat in the Senate.

The election law changes, which would undermine the influence of political parties and the special interests that fund them, are unpopular with Democrats. But they say they are willing to deal. “My caucus understands we have to do some things we don’t like,” Assembly Speaker Karen Bass (D-Los Angeles) said.

The day had begun with Dennis Hollingsworth of Murrieta elected as the new Republican leader in the state Senate, shortly after a midnight coup unseated Dave Cogdill of Modesto. Hollingsworth promptly insisted that the three months of negotiations over how to close California’s nearly $42-billion deficit begin anew and lawmakers abandon the sales, income and gas tax hikes that are part of the fiscal package Cogdill helped negotiate.

“We should reopen negotiations and we should pass a no-tax budget,” Hollingsworth said. “The majority of the Senate Republican caucus said we want to stand for a no-tax budget.”

But the coup appeared to have marginalized him and the 10 other GOP senators who have already cast their lot against new taxes. Democrats and the governor refocused their efforts away from the caucus leadership and on the small group of GOP dissidents who have signaled they are prepared to vote for the package.

Three GOP votes are needed in each house for the two-thirds vote required to pass budgets; they have already been secured in the Assembly, leaders say. One more is needed in the Senate.

“I want to be very clear: We are not starting over,” said Senate President Pro Tem Darrell Steinberg (D-Sacramento).

Schwarzenegger agreed, telling reporters at an afternoon news conference: “We are still one vote short and we’re going to find that one vote.”

The Senate convened every few hours, but the debate on the chamber floor was unproductive. Democrats read letters from constituents beseeching them to pass the budget so state services could resume. Republicans parried with correspondence from their backers decrying the imposition of higher taxes on already struggling families.

Throughout the day, negotiators stayed focused on Maldonado and GOP Sen. Dave Cox of Fair Oaks, both of whom had indicated they might be persuaded to cross the aisle and vote with Democrats to pass the budget. Legislative leaders and Schwarzenegger’s aides pored over wish lists from both senators.

After lunching on salmon and swordfish with Schwarzenegger at an Italian restaurant a few blocks from the Capitol, Maldonado emerged enthusiastic.

“The governor is on board with my constitutional amendments,” Maldonado said, referring to his request that state election law be changed to help moderate politicians such as him and to penalize lawmakers when the state’s budget is late.

“If everybody is happy with the drafts, we’ll have a budget for the state of California,” he said.

But Democrats said Maldonado’s call for “open” primaries, in which candidates of all parties would compete in the same primary, followed by a runoff of the top two vote-getters, was too significant to be pushed through in a budget deal. Some also accused Maldonado, who is in his last term in the Senate, of trying to leverage his budget vote to make a future statewide run easier.

“I’m not here to worry about Abel’s political future,” said Sen. Gloria Romero (D-Los Angeles).

Maldonado denied such a motive. But many lawmakers in both parties hold safe seats that would become competitive if Maldonado’s request, which would require a nod from voters, were enacted. Schwarzenegger has supported the notion, but even if Senate Democrats agreed to put such a measure on the ballot, it might alienate others who have agreed to vote for the budget package.

“I’m open to discussion on the merits of the open primary,” said Sen. Joe Simitian (D-Palo Alto). “But I’m hard-pressed to understand what on earth it has to do with solving the state budget deficit.”

Sen. Denise Moreno Ducheny (D-San Diego) said Maldonado’s suggestion that legislators’ pay be docked whenever the state budget was not on time was “particularly offensive” and could give wealthy legislators inappropriate leverage in negotiations.

“You could have rich people telling everyone else, ‘Vote now if you want to feed your family,’ ” Ducheny said. “I think it’s unethical . . . to tie your pay to your vote.”

But the severity of the fiscal crisis has grown so much that Steinberg continued to court Maldonado.

Steinberg met with him Wednesday night, as did Assembly Speaker Karen Bass (D-Los Angeles) and Assembly Republican leader Mike Villines of Clovis.

“Darrell, the governor and I, we are close” to a deal, Maldonado said as he rushed between offices. “We still have to make some rounds.”

Negotiations with Cox appeared less promising. Capitol officials said Schwarzenegger and Democrats haven’t agreed to Cox’s call to postpone enactment of California’s landmark law limiting greenhouse-gas emissions.

That law, which won Schwarzenegger international acclaim, is one of the governor’s proudest achievements. But many business groups in California complain that it would be expensive to implement.

Democrats also have not budged on other Cox demands: to give employers more leeway in scheduling meal and rest breaks for their workers, and his insistence that legislators reduce some of the $14.4 billion in taxes contained in the budget package.

Earlier in the day, Hollingsworth wasted no time trying to capitalize on his new position. A flier for a $1,000-per-person fundraiser for Hollingsworth scheduled for Wednesday night declared, “You are cordially invited to a reception in support of the new Senate Republican Leader Dennis Hollingsworth.”

Timothy Clark, a spokesman for Hollingsworth, said in an e-mail that Hollingsworth had postponed the event and “is turning all of his energies to leading the Republican Senate caucus through this current budget debate.”

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patrick.mcgreevy@ latimes.com

jordan.rau@latimes.com

Times staff writers Marc Lifsher, Evan Halper and Dan Morain contributed to this report.

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(BEGIN TEXT OF INFOBOX)

Among the tax hikes in the proposed state budget:

1.15%

Vehicle license fee, nearly double the current rate

1 cent

Increase in sales tax

12 cents

Per-gallon increase in gasoline tax