California legislators OK budget deal after 20-hour session

SACRAMENTO — After nearly 20 hours in session, lawmakers this afternoon completed work on a plan to close a giant hole in California's budget by slashing billions of dollars from almost all state programs, borrowing heavily from local governments, reducing state workers' pay through furloughs and reforming some of the ways the state does business.

The Assembly approved the final bill in the package about 3 p.m. The Senate finished voting about 6:30 a.m. and adjourned until Aug. 17 after a long night that saw almost no speeches but plenty of earnest lobbying by leaders of both parties to secure the necessary votes.

The lower house killed two of the most controversial parts of the deal -- one that would have taken $1 billion in gasoline tax money from local governments and another that would have allowed oil drilling in state waters off the Santa Barbara coast.

Local governments said the gas tax scheme was illegal and vowed to sue. The move would have cost Sacramento County about $20 million -- a 45 percent reduction in funds that improve local highways. The city of Sacramento figured to lose about $7.5 million, about half of its budget for street work.

Legislative leaders and Gov. Arnold Schwarzenegger agreed to the shift as part of the budget deal struck on Monday, and the Senate passed the measure early this morning on a 21-19 vote. But the Assembly balked, and it was unclear how lawmakers would fill the hole in the budget deal.

Environmental lobbyists worked hard to kill the plan to drill for oil at Tranquillon Ridge and finally succeeded. The measure, thought to bring $100 million to the budget solution, had passed the Senate 21-18. But it fell 13 votes short in the Assembly.

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