Capitol Alert: Day 64: Schwarzenegger meets with leaders, but still no budget

Gov. Arnold Schwarzenegger called a last-minute session with Democratic and Republican leaders Thursday afternoon in his Capitol office, a day after downplaying such "Big Five" meetings. Leaders sounded upbeat but remained vague after convening behind closed doors for about an hour.

"I thought it was one of the more positive, productive conversations that we've had," said Senate President Pro Tem Darrell Steinberg, D-Sacramento. "It's clear there's a desire to try to wrap this up."

"I think everyone would like to see things concluded, but we need to agree upon the numbers," said Assembly Republican leader Martin Garrick," R-Solana Beach. "Staff will be going back and reviewing some numbers."

Democrats and Republicans remain divided over how much to cut education and social services, and whether to use taxes to help fill the $19 billion deficit. Schwarzenegger also wants major changes in the state's pension, budget and tax systems.

The current Legislature now ranks second on the list of latest budgets dating back to at least 1977, as far back as Department of Finance records go. The latest budget was passed Sept. 16, 2008.

Governors dating back to Republican George Deukmejian have used "Big Five" meetings to help close the state budget. The closed-door process has grown in importance as lawmakers have become less capable of resolving their differences through the legislative process.

Schwarzenegger on Wednesday tried to dispel notions that the "Big Five" process is crucial to budget writing. "It seems to me there's a misconception that the only time there is work being done here in the building is when there's a Big Five meeting," he said. "But the fact of the matter is the Big Five meetings don't really do as much."

Nevertheless, he called an impromptu session Thursday since all four leaders, as well as Senate Republican leader-elect Bob Dutton, R-Rancho Cucamonga, were in Sacramento.

Schwarzenegger met earlier Thursday with Steinberg and Assembly Speaker John A. Pérez separately in his office. Then Schwarzenegger headed over to Cafeteria15L with GOP leaders and aides to discuss the budget over cigars and lunch.

PHOTO CAPTION: Gov. Arnold Schwarzenegger discusses the legislature's failure to pass a state budget plan, during a news conference in Sacramento on Wednesday, Sept. 1, 2010. (AP Photo/ Rich Pedroncelli)