Thursday marks the 78th day of California's new fiscal year and the longest amount of time the state Legislature has gone without approving a budget package, the AP/Contra Costa Times reports.

Despite the record-breaking impasse, lawmakers still appear far from reaching a budget agreement. Democratic and Republican legislators remain deadlocked over whether to impose new taxes or cut program spending (Lin, AP/Contra Costa Times, 9/15).

Competing Plans

The governor's plan, supported by many Republicans, would:

• Reduce spending on Medi-Cal, California's Medicaid program;
• Make deep cuts to In-Home Supportive Services; and
• Eliminate CalWORKS, California's welfare-to-work program.

Democrats have proposed a plan that aims to avert some of the governor's proposed cuts by:

• Suspending certain corporate tax breaks; and
• Introducing other tax increases.

Both plans propose spending cuts for prison medical care (California Healthline, 8/30).

Stalemate Expected To Continue

On Wednesday, Gov. Arnold Schwarzenegger (R) returned from a trade mission in Asia. So far, there are no meetings scheduled between the governor and California's legislative leaders (Goldmacher, "PolitiCal," Los Angeles Times, 9/15). Senate President Pro Tempore Darrell Steinberg (D-Sacramento) has said a budget agreement might not come until after the November elections.

California already has started deferring billions of dollars in payments to counties, schools and other vendors that contract with the state. In addition, four not-for-profit health clinics and two dental care clinics have closed this year, partly because the state has suspended reimbursements for adult dental care (AP/Contra Costa Times, 9/15).

State Controller John Chiang (D) has said California might need to begin issuing IOUs as early as October if the state does not pass a budget package soon (California Healthline, 9/10).