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State Budget Negotiations Resume At Capitol

Sacramento, CA — Legislative leaders and Governor Schwarzenegger are scheduled to resume talks today aimed at closing California’s $26.3 billion budget deficit.

The Associated Press reports that lawmakers from both parties are expressing optimism as they restarted negotiations late Friday night after talks had stalled earlier in the week. Officials cautioned that a lot of work remains as they head back to negotiations today.

It’s not clear how the two sides will bridge the gap. Revenue is running so far behind spending obligations that sometime in September the state will run short of cash to pay for most of its core functions. I.O.U.’s to select agencies started to go out last week.