SACRAMENTO, Feb. 11 (UPI) -- A tentative deal has been reached that could break California's long-running budget impasse by the end of the week, sources told The Sacramento Bee.
The Bee said Wednesday that the agreement between Gov. Arnold Schwarzenegger and legislative leaders would close California's projected $140 billion budget deficit through borrowing, tax increases and spending cuts.
The deadlock over the budget has threatened state services as Republicans and Democrats battle primarily over taxes and program spending.
The Bee said Wednesday the plan could be put to a vote by Friday with a two-thirds majority required for passage.
Sources close to the negotiations told the newspaper that the tax provisions include an across-the-board hike in the income tax, higher vehicle registration fees and a 1-cent-on-the-dollar increase in the sales tax. The hikes would be in effect for a minimum of two years.
In return for their support on taxes, GOP leaders got agreements on spending limits and establishment of a rainy day fund, which the Bee said would require voter approval.
