SACRAMENTO — An agreement with Indian gambling interests that would generate nearly $1.3 billion for the state next year has not been signed, but budget negotiators have already seized on the new revenue as the potential bridge between Gov. Arnold Schwarzenegger and the Democrat-controlled Legislature.
Democratic leaders say they want to add at least $400 million to the governor’s proposed $103 billion spending plan for next year.
The wish list, lawmakers and legislative aides say, includes money to lift a cap on enrollments at state colleges and universities that will cost about $60 million. They want to restore $98 million that will help pay wages of home care providers to the disabled, according to sources in the Assembly. And Senate Democrats want to provide a cost of living increase to welfare recipients that will add about $234 million to the governor’s plan, according to aides in the Senate.
With lawmakers brushing aside Tuesday’s constitutional deadline for passing the budget, the focus now becomes getting an agreement before the end of the fiscal year in two weeks. Negotiations center on how to fit more spending into the governor’s plan and while the tribal windfall will help, finding compromise will not be easy.
Still, the governor has said negotiations are going smoothly and he expects an agreement well before the end of the month. Legislative leaders met with Schwarzenegger for over an hour behind closed doors Tuesday and emerged saying progress was being made.
The differences hinge on taxes and spending cuts. Schwarzenegger and Republican lawmakers won’t back new taxes to pay for the extras Democrats want, while Democrats said they won’t support cutting existing programs more to pay for their new wish list.
Despite public assurances that all is well, Schwarzenegger also surprised the Capitol by announcing Wednesday he will travel to Chico today to attend a rally on the budget at a local mall. He’s expected to call on the Legislature — especially the Democrats — to approve his budget on time.
Rob Stutzman, Schwarzenegger’s communications director, said the rally isn’t meant to bash Democrats, which Schwarzenegger said Tuesday he wouldn’t do. Instead, the governor just wants to prod legislators to pass a budget on time, he said.
The proposed agreement with the tribes, which could be completed by Monday, would ease much of the tension.
Details of the evolving compact with five tribes indicate it would provide the state an immediate $1 billion payment, expected to be financed by a bond sale backed by casino profits. Tribes would also pay $275 million in annual fees until 2030.
In exchange for the money, the tribes would be allowed to add thousands of new slots machines to their casinos.
Schwarzenegger’s May budget counted on $500 million in ongoing revenue from the tribes — nearly double the $275 million that annual tribal licenses is expected to bring. He said in May that any extra money would be used to pay back money borrowed from transportation trust funds.
But Democrats say they want some of that money to pay for their programs.
“Democrats will have to come together to ensure that some of that tribal money will be used across the board,” said Assemblyman Rudy Bermudez, D-Norwalk, a member of the budget committee.
Assembly Speaker Fabian Nunez, D-Los Angeles, said Tuesday that tribal money along with other options will be explored, including potentially borrowing more of the $15 billion in bond money approved by voters in March.
Schwarzenegger said he would not support more borrowing but needs the Democrats, who control both houses of the Legislature, in order to get his budget on time.
Administration officials have said the governor will resist using any of the $1 billion one-time money from Indian casinos to pay for ongoing services. Instead, talks are focused on how much of the ongoing support from the tribes — estimated next year at $275 million but also expected to grow to about $500 million in a few years — can be used to satisfy Democrats.