By David Siders and Kevin Yamamura
dsiders@sacbee.com
Published: Tuesday, Jun. 14, 2011 – 12:00 am | Page 1A
Last Modified: Tuesday, Jun. 14, 2011 – 7:04 am

Two days before the state budget deadline and with no sign of a deal, Gov. Jerry Brown said Monday he would consider using accounting gimmicks to balance California’s budget deficit, despite his longstanding promise not to.

His changing rhetoric, following months of failed talks with Republicans, comes as Brown braces for the Legislature to send him a budget that does not include the tax revenue he is seeking.

“I will take a very hard look at it,” Brown told reporters at the Capitol. “We’ve had discussions with the leadership, and I’ve told them the way I see things, and we’ll see what happens when they bring it down.”

Such a move would be politically perilous for Brown’s still-young governorship, but it remains unclear if he would follow through.

Brown, who is trying to close the state’s remaining $9.6 billion deficit, said he is still negotiating with Republicans and would continue to after Wednesday’s rarely-met constitutional deadline. The Democratic governor could continue talks without committing to a budget for as long as 12 days after it is passed, the time he has to sign or veto it.

Brown has long said that he would sign only two kinds of spending plans, one relying on voter-approved taxes – a plan requiring a two-thirds majority in the Legislature and at least two Republican votes in each house – or one imposing all cuts.

Otherwise, Brown said in February, California “wouldn’t have a budget. … Things would break down over time, and then they would do something eventually.”

Asked about his promise to not accept gimmicks, Brown said Monday that nothing has changed.

“I just don’t give you all my strategies before I implement them,” he said.

Lawmakers are under pressure to send a balanced budget to Brown by Wednesday or forfeit pay, and sources not authorized to speak publicly said legislative Democrats are drafting a plan that relies on non-tax revenues and cuts while avoiding the harshest program reductions.

The majority-vote budget would reimpose $3 billion in deferred payments to schools, forcing districts to borrow more while avoiding deep program cuts. Brown proposed in May using additional tax dollars to pay schools that money on time.

It also would rely on taking funds from First 5 programs. Lawmakers had agreed to take $1 billion in March, but Brown stopped counting on that revenue in May in the wake of legal challenges filed by First 5 commissions.

Democrats are also exploring a majority-vote method to scale back redevelopment agencies and still get $1.7 billion from them for the budget.

Other parts of the plan are unclear. Two sources said lawmakers are again entertaining the idea of selling state buildings and leasing them back to raise cash, though the plan would be different from the controversial one pursued by former Gov. Arnold Schwarzenegger and dismissed by Brown.

Senate President Pro Tem Darrell Steinberg, D-Sacramento, suggested the upper house will move forward with a plan that does not include Brown’s tax proposal if Republican support fails to materialize by Wednesday.

“We’re going to pass a budget by June 15. Period,” Steinberg said, after which he said Brown could continue negotiating until month’s end.

For a governor who has made public service reductions and an election on taxes the focus of his administration, accepting an alternative spending plan could weaken him politically.

“If the governor can’t come in in his first year in office, be able to pull the Legislature across the line with him and get a budget done, there’s a question of who’s driving the ship,” said Bill Whalen, a research fellow at Stanford University’s Hoover Institution and former speechwriter for Gov. Pete Wilson. “If he cannot get the budget done, or really gets it done in kind of a bloody, ugly way, then the question is how forceful can he be in getting the agenda done next year.”

By suggesting he is open to one-time, non-tax revenue, Brown is advertising to Republicans that he has options other than negotiating. Political observers of both parties said Brown is unlikely to sign a budget that includes the most egregious accounting maneuvers.

“He made it pretty clear that he wasn’t going to support a gimmicks budget,” said Bill Carrick, a Democratic strategist. “I think he’s right at trying to maintain as much flexibility and give and take as he possibly can.”

To read entire story, click here.