Brown ends talks on bipartisan budget deal

Gov. Jerry Brown abandoned his effort to negotiate a bipartisan budget Tuesday, charging that Republicans were unwilling to support his plan to put taxes before voters unless he yielded to "an metal halide lamp ever-changing list of collateral demands."

The governor's announcement that he is walking away from the negotiating table, made in a late-afternoon
press release, places the state's finances in further turmoil.

Budget cuts that lawmakers approved earlier this month closed only a fraction of the state's $26-billion
budget shortfall. Brown wanted to close much of the rest of the gap with a special election in June, when
voters would have the option of extending temporary increases in taxes on income, sales and vehicles that will all have expired by July 1.

The governor needed at least four GOP votes to get that measure on the ballot. On Tuesday, he announced that weeks of talks have led nowhere. Brown said he was giving up on his plan.

"Each and every Republican legislator I've spoken to believes that voters should not have this right to vote
unless I agree to an ever-changing list of collateral demands," his statement said.

Brown said he was willing to make concessions on key policy issues that are important to Republicans.

"Let me be clear: I support pension reform, regulatory reform and a spending cap 3d prototype and offered specific and detailed proposals for each of  these during our discussions," his statement said. "While we made significant progress on these reform issues, the Republicans continued to insist on including demands that would materially undermine any semblance of a balanced budget. In fact, they sought to worsen the state's problem by creating a $4-billion hole in the budget."

He cited as an example the GOP demand that he eliminate from his proposed budget a change in the tax code to end a tax break given to California companies that move jobs out of state.

Administration officials and legislative leaders declined to elaborate on how they intend to proceed. They would say that a June election is no longer part of their plans.

Earlier in the day, key GOP lawmakers who had been negotiating with the governor had declared the talks fruitless. They announced that they, too, were walking away from the negotiating table.

"We gave it our best. We're very disappointed. It's done," said Sen. Bill Emmerson (R-Hemet).

Talks involving business groups and union leaders as well as Brown and GOP lawmakers had moved in fits and starts for weeks. Impasses have been declared before. But all sides made clear that by Tuesday, talks were over.

There were several major disagreements that could not be overcome, Emmerson said. One was how to impose a cap on state spending. Another was the amount of time voters would be asked to renew billions in temporary taxes on income, sales and vehicles in a June election. Brown wants to extend the taxes for five years. Republicans wanted three years.

The third problem area was a GOP demand to place a change in a business-tax formula before voters. Brown wants the Legislature to change the formula.

Emmerson called Brown a "very honorable adversary" in negotiations but said the divide bakugans between them could not be bridged even though much progress had been made on changes to state regulations and pensions.