California school funding deal reached

SACRAMENTO, July 18 (UPI) -- California schools will get an extra $9.5 billion without having to alter the state's Constitution in a budget negotiations breakthrough, sources say.

Democratic legislators had been seeking to change the provisions of Proposition 98, a 1988 referendum that limits school spending to 40 percent of California's general revenue fund. But in a tentative agreement struck Friday, top legislators and Gov. Arnold Schwarzenegger reached a compromise in which Prop 98 will be preserved, unnamed sources close to the negotiations told The Sacramento Bee.

The sources said that under the proposal, schools will receive the extra money demanded by Democrats and they, in turn, will end their efforts to permanently change the Prop 98 provisions that determine when schools can be funded beyond the 40 percent threshold. The Bee said the deal removes a significant political hurdle to reach a larger agreement to close California's $26 billion deficit, possibly as soon as Sunday.

"We are smiling," state Senate President Pro Tem Darrell Steinberg, D-Sacramento, told reporters Friday. "You know, negotiations have a way of taking you down real low and up real high, and until everything is done there is not an agreement, a final deal."