Senate President Pro Tem Darrell Steinberg, D-Sacramento, told reporters, "It is probably likely there will be a midyear budget session," and said next year's deficit could be as large as $12 billion.
It marks the first public acknowledgment by a leader at the Capitol that the budget deal struck in October to close a $19 billion hole was not solid enough to last the entire fiscal year.
Also Wednesday, Gov.-elect Jerry Brown told reporters that he would begin taking action on the state budget as soon as today.
Both developments come as voters passed propositions on election day that will make it both simpler and more complicated for lawmakers at the Capitol to deal with the budget.
Voters approved Prop. 25 to allow the budget to be passed by a simple majority rather than the two-thirds vote that tied up negotiations for months.
Voters also approved Prop. 26, which changes the state Constitution so that some fees will become taxes, which means they would require a two-thirds vote to be raised.
Backers of the competing measures were surprised that voters approved both.
The implications of those measures - along with Prop. 22, which limits the state's ability to take local funds - likely won't be fully known for several years and they raise questions that already are eliciting disparate answers.
What is immediately known is that Prop. 22, the local fund prohibition, adds a $1 billion hole to the current fiscal year.
That could rise to several billion dollars per year in future years, though the amount is not certain.
Additionally, voters rejected a repeal of corporate tax breaks that have been negotiated as part of recent budgets and that would have eventually brought in revenue for the state by $1.3 billion annually.
Mark Baldassare, president of the Public Policy Institute of California, said the theme he sees running through the votes on ballot propositions is extreme voter dissatisfaction with the Legislature, which had a 10 percent approval rating in the institute's last survey.
He said the results - including those on redistricting measures that do not affect the budget - show, "voter distress, disapproval and dissatisfaction with the Legislature's handling of important fiscal and political issues."
Democrats hailed voters' passage of Prop. 25 and the election of Brown, as a game changer while Republicans said the message was for the state to curb spending.
Steinberg acknowledged, though, that the message he got from voters was mixed. "I think they're tired of the late budgets, thus Prop. 25.
"I think they are also hurting economically," Steinberg said, noting the defeat of a proposed increase in the vehicle license fee to fund state parks, Prop. 21.
Meanwhile, Steinberg's counterpart, Senate Republican Leader Robert Dutton of Rancho Cucamonga (San Bernardino County) said voters' message was "they want us to live within our means and they don't want to hear the excuse anymore that you need a two-thirds vote to pass a budget."
He predicted that the majority-vote budget measure is not "going to make that much difference."
"There might be some Democrats who feel like this will make Republicans totally irrelevant," Dutton said. However, he predicted lowering the threshold will make voters "realize that's not the problem."
That prediction is not shared among conservatives. Jon Coupal, president of the Howard Jarvis Taxpayers Association, said Prop. 25 severely limits the ability of Republicans to impact the formation of state spending plans.
"Their ability to affect the budget process is now zero," Coupal said. Conservatives did cheer the passage of the Prop. 26 fees measure, along with Prop. 22, the bar on taking local transportation and redevelopment funds, even though that puts the $1 billion hole in the budget.
E-mail Wyatt Buchanan at wbuchanan@sfchronicle.com.
For more election-related news and information, visit our California Elections 2010 page.
This article appeared on page E - 1 of the San Francisco Chronicle
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