From: SignonSanDiego.com:
Legislative leaders said yesterday that they have an agreement with Gov. Arnold Schwarzenegger that will end a record 81-day budget deadlock, allowing payment of billions of dollars owed schools, health care providers and others.
Schwarzenegger threatened to veto a compromise budget sent to him Tuesday because it increased paycheck tax withholding for individuals and did not include a strong reserve fund to help close future budget gaps.
Republican and Democratic leaders, after meetings with the governor yesterday, said the Legislature will send him legislation today that they believe meet his demands.
“There appears to be an agreement,” said Aaron McLear, the governor's press secretary. “We will be able to confirm that once the governor meets with the legislative leaders tomorrow.”
The Democratic-led Legislature and the Republican governor had wanted to raise taxes to help close the $15.2 billion deficit. But they could not get the required handful of votes from Republicans who said a tax hike would harm the economy and cost jobs.