Capitol Alert

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Gov. Arnold Schwarzenegger and legislative leaders met in the governor's office for about two and a half hours Wednesday to hash out a water deal, but they said several outstanding issues remain, including the size and characteristics of a multibillion-dollar bond.

They plan to meet again Thursday at 11:30 a.m. Leaders have set Friday as a goal for producing some semblance of an agreement as the governor continues to withhold action on 703 bills that face a Sunday deadline. They said they did not discuss the bill situation Wednesday.

Senate Republican leader Dennis Hollingsworth, R-Murrieta, said leaders were focusing on a bond smaller than the $12 billion one previously discussed. He said Republicans are looking at one between $8 billion to $10 billion.

Senate President Pro Tem Darrell Steinberg, D-Sacramento, said the size of the bond remains a concern after the state went through a historic budget crisis. He said leaders are discussing how much of the bonds should be paid for by all taxpayers as opposed to water users, as well as conservation requirements and environmental concerns.

On a side note, Hollingsworth met earlier Wednesday with Steinberg in the pro tem's office to ease tensions after the two feuded during Tuesday's "Big Five" meeting.


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