The state Assembly early Monday rejected deep cuts in education demanded by Gov. Pete Wilson, prolonging the 2-month-old deadlock that forced California to issue IOUs for the first time since the Depression.
"The Assembly Democrats have virtually assured that the state of California will not have a budget on Sept. 1, and they should be prepared to explain that to the people of California," said Dan Schnur, Wilson's spokesman.The Democratic-controlled Legislature had passed a $57 billion budget over the weekend, then got to work on bills to cut spending on welfare, aid to local governments and schools. Wilson, a Republican, had said he wouldn't sign the spending plan without those cuts.
The Senate approved the 12 bills Sunday and sent them to the Assembly.
There, lawmakers voted against considering the school funding proposal 45-1, with Republicans boycotting. The Assembly also approved a measure on aid to local governments, but changed it from the Senate version.
California has been without a budget since the fiscal year began July 1 because Wilson and the Legislature have been unable to come to terms over how to close an $11 billion deficit caused mostly by the recession.
The impasse has thrown state government into turmoil and forced California to issue IOUs to employees, vendors and taxpayers for the first time since 1936.
During the deadlock, Wilson and Republican leaders urged deep cuts throughout government, including welfare and education.
The Democrats, led by Assembly Speaker Willie Brown, sought more moderate cuts in welfare, protection for school funding and deeper cuts in prison operations.
Democrats have majorities in both houses but lack the two-thirds margins needed to pass budget bills on their own.
With little spending authority or cash, the state has issued $3 billion worth of IOUs to pay bills, tax refunds and thousands of employees' wages.
During July, banks accepted the IOUs as regular checks, but earlier this month they stopped, putting pressure on lawmakers and the governor to act.