Calif. lawmakers debate budget fix as state controller warns of IOUs as early as next week

Calif. Legislature begins debate over budget fix

SACRAMENTO, Calif. — Lawmakers have begun a sharp debate about a Democratic plan to close California’s projected $24 billion deficit but a quick resolution seems unlikely.

The plan debated Wednesday in the Assembly and Senate appears to lack enough support from Republicans to pass. Gov. Arnold Schwarzenegger criticizes the plan for raising some taxes and says it would only partially close the deficit.

In the first round of voting Wednesday, the Senate and Assembly were unable to agree on part of the Democrats’ plan dealing with cuts and some fee increases. It needed 27 votes in the Senate to pass but failed 22-16.

State Controller John Chiang says without a balanced budget, the state will be $2.8 billion in the red at the end of July.