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Assembly Rejects Two More Budget Plans

Two more budget plans have been shot down in the state Assembly, almost assuring the state will begin the new fiscal year next week without a spending plan in place.

Party leaders say they will talk this weekend and hope to bring back new ideas for compromise next week, but no one in the Capitol is very optimistic. The state is facing a record $38.2 billion shortfall and is operating for the first time completely on borrowed funds.

Officials say that Wall Street bankers are not likely to loan the state any more money until a new budget is approved. Democrats want to solve the budget gap through a combination of spending cuts and tax hikes.

Republicans say they will not agree to any tax increases.