STATE DEADLINE FOR NEW BUDGET MISSED AGAIN.

Byline: Harrison Sheppard Sacramento Bureau

For the 19th consecutive year, the state Legislature failed to pass a budget by Wednesday's constitutional deadline, once again setting the stage for budget gridlock this summer.

The Democratic budget proposal, which failed to gain the necessary two-thirds margin in either house, remains separated from Gov. Arnold Schwarzenegger's May budget revision by at least a half-dozen major items, each worth several hundred million dollars.

The governor's proposal calls for the state to spend $88.5 billion from its general fund, while the Democratic plan spends $89.2 billion.

Democrats contend that some of the governor's planned savings are unrealistic, and that more should be spent on education and health care. Republicans, meanwhile, complain that they had too little time to study the 700-page Democratic proposal, and that it spends too much and increases the state's deficit in future years.

``The budget that's on the floor today is fiscally irresponsible,'' said Assemblyman Keith Richman, R-Granada Hills. ``It makes next year's structural deficit $2 billion worse than the governor's proposal. It's a budget that's going in the wrong direction compared to what the governor proposed.''

The Assembly voted 45-32 in favor of the Democratic version of the budget, falling nine votes short of the two-thirds support needed from its 80 members. The Senate also fell short, on a 25-13 vote.

The state constitution calls for the Legislature to pass a budget by June 15, and the governor to sign it by June 30, but does not spell out any enforcement mechanism. The last time the Legislature made that deadline was 1986.

A long budget deadlock could intersect with heated debate expected this summer over the governor's proposed ballot measures, including a budget reform act opposed by Democrats. Some Democrats suspect Republicans may want a long budget gridlock to spark voter frustration and gain support for Schwarzenegger's proposed Live Within Our Means Act during the Nov. 8 special election.

Schwarzenegger's budget reform ballot measure does spell out some enforcement mechanisms to encourage on-time budgets, including automatic spending cuts if a budget is not passed by July 1. It also limits growth in spending to the average of growth during the prior three fiscal years.

``This little game here today is about the November ballot,'' said Assemblywoman Jackie Goldberg, D-Los Angeles. ``It has nothing to do with the budget.''

But Republicans insisted their objections were based on fiscal considerations.

Staff Writer David M. Drucker contributed to this report.

Harrison Sheppard, [phone]

harrison.sheppard(at)dailynews.com

ARNOLD VS. THE DEMS:

Here are a few of the key issues on which legislative Democrats and Gov. Arnold Schwarzenegger disagree in the proposed 2005-06 budget:

--Teachers' pensions: The governor proposes shifting $469 million in teacher pension costs to local school districts. Democrats say no net savings would result from the governor's plan because the state's financial commitment to education under Proposition 98 would increase by an equivalent amount.

--Employee compensation: The governor proposes to save $408 million by renegotiating state employee salaries. Democrats believe the unions will not agree to these concessions.

--VLF loan: The state owes about $1.2 billion to local governments by 2006-07 relating to cuts made in the vehicle license fee. Schwarzenegger proposes repaying half of that in 2005-06, while Democrats want to wait until 2006-07 to pay the full amount.

--Future deficit: The governor's 2005-06 proposal will result in a deficit the next year of $5.7 billion, while the Democratic proposal results in $6.4 billion. Democrats argue that because Schwarzenegger is relying on ``unachievable savings'' his actual future-year deficit is $7.7 billion.

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ARNOLD VS. THE DEMS: (see text)