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Compromise State Budget Considered

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A compromise budget solution is being considered in Sacramento that would delay most of the difficult choices over spending and tax hikes until next year. The idea, which has not been endorsed by any of the negotiators, would be to use a complex tax swap to finance the elimination of the state´s existing $10.7 billion deficit.

Democrats would give up the idea of raising taxes to pay back the loan but instead structure the repayment so none of the money is actually needed until next summer or later.

Steven Szalay, executive director of the California State Association of Counties, says the idea is one of several being discussed.

Hilary McLean, spokeswoman for Governor Davis, says there are several variations of the tax swap plan being discussed internally including this proposal.