No budget deal in sight as new fiscal year looms

As the June 30 deadline to pass a state budget looms, lawmakers admitted Friday that there are still some unresolved issues that will prevent them from completing the budget on time.

A two-house conference committee met on Friday, and on a party-line vote, approved a report that Democrats claim met Governor Schwarzenegger's and Republicans halfway. However, Republicans on the panel said the plan still needed additional cuts.

The Legislative Analyst's Office has predicted that there will be a $3.4 billion shortfall this year and an even larger gap of $5 billion for fiscal 2008-2009. Because State revenues are less than expected, you can bet that this will only complicate an agreement between Democrats and Republicans moving forward.