State lawmakers from both parties say they are close to an agreement with Governor Schwarzenegger on plans to borrow $15 billion and impose a state spending cap. Schwarzenegger worked late last night negotiating with Democrats and Republicans to work out an agreement that had seemed all but dead earlier this week.
The current draft of the plan would require the Legislature and governor to adopt and conform to a balanced budget. It also would create a reserve fund and prohibit future borrowing to pay for operating expenses.
If approved, the measures would go to voters on the March ballot. Assembly Republican leaders were meeting at noon with the governor. Schwarzenegger´s spokesman Rob Stutzman says the governor was optimistic an agreement will be approved.