State budget deal reached

The long-awaited agreement relies on $7.5-billion in spending cuts, along with delaying a corporate tax deduction, sources are telling the Sacramento Bee. They're also relying on optimistic projections for how much the state will receive in tax revenues and federal dollars. Floor votes could come next Thursday.

As part of the deal, state leaders will place a measure on the 2012 ballot to strengthen the state's "rainy-day fund" that is a softer version of one voters rejected last year. Schwarzenegger and legislative leaders also seem confident that Service Employees International Union Local 1000, which represents 95,000 state workers, will reach a contract deal within the next week that includes pension reductions for future employees. The governor demanded pension cuts and a "rainy-day fund" as conditions to signing the budget.