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Legislative Democrats will vote by Friday's deadline on a state budget that has a "very substantial reserve" and is free of gimmicks to erase a $15.7 billion deficit, Senate President Pro Tem Darrell Steinberg said this morning.

Steinberg said he "spent a lot of quality time" with Assembly Speaker John A. Pérez over the weekend working on budget matters, but did not meet with Gov. Jerry Brown. As outlined this morning in The Bee, legislative leaders started negotiations this month about $2 billion apart from the Democratic governor, with differences largely having to do with cuts to welfare-to-work, child care, in-home care and Cal Grants.

Assembly Democrats took a harder line than their Senate counterparts during the budget committee process earlier this year by outright rejecting the governor's overhaul of welfare-to-work and Cal Grants.

Lawmakers face a constitutional deadline Friday to pass a budget under threat of losing their pay. But that threat is not as severe as last year, when Democrats sent Brown a budget but still lost their pay because Controller John Chiang deemed their plan out of balance. A Sacramento Superior Court judge ruled this spring that the controller has no such authority to interpret the Legislature's budget.

That should give legislative Democrats more leverage this year in discussions with Brown, whose veto last year triggered the Chiang pay revocation. Steinberg would not acknowledge that point, though he noted today, "We would much rather have an agreement with the governor. But we also know our line."

On some matters, the governor may be running out of time. In his January budget, Brown sought an ambitious overhaul of welfare-to-work that was to save nearly $1 billion. He wanted to create two new segments called CalWORKs Basic and CalWORKs Plus, while moving unemployed families into a new Child Maintenance program with smaller grants. Those changes would require significant policy changes that lawmakers have rejected, so it is difficult to see how Brown can convince them to do so in a week.

"We know there have to be some cuts in this area," Steinberg said. "But we think it would be wrong to cut grants in ways that would bring people to 24 percent of the poverty level. We also don't want to do things in the name of reform that are going to result in people just on the verge of becoming self-sufficient losing what little assistance they have, and go backwards. So those 'reform' proposals ... I think that whatever we might have to do in that area, we ought to do it with a little more time and consideration."



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