Posted March 16, 2006 at 12:20 a.m.

SACRAMENTO (AP) -- A frenetic last-minute attempt to place a massive public works bond on the June ballot failed late Wednesday, handing Gov. Arnold Schwarzenegger a key legislative defeat in his bid for re-election.

The collapse of negotiations over the bond measure came just hours before an administrative deadline to place measures on the primary election ballot.

"We ran out of time," Senate President Pro Tem Don Perata said, after the Senate passed an urgency bill appropriating $1 billion for levee repairs from the state's reserve fund but didn't take up any bond measures.

A partial deal had appeared possible just hours earlier after legislative leaders from both parties emerged from the governor's office. Whatever agreement might have been struck behind close doors crumbled shortly afterward.

"While we are disappointed we did not make the June ballot, everyone knew it would be very difficult," Schwarzenegger spokeswoman Margita Thompson said in a statement. "The governor has always said what is important is not June or November but that he and the Legislature work to rebuild California.

"At this point, it is critical that the Legislature build upon all of the work that has been accomplished thus far."

The Assembly and Senate convened Wednesday night, but to consider different issues.

The Assembly passed two bills to place measures on the June ballot: a $10.4 billion bond to build schools and upgrade universities, and a $4.15 billion bond to repair the state's fragile levee system. It also included a $9.1 billion school and university bond measure that would be placed on a ballot in 2008.

The Senate considered only the emergency levee appropriation, which passed on a 33-0 vote.

"We took the action tonight that was necessary," Perata said.

The Senate's surprise action came after Assembly Speaker Fabian Nunez, D-Los Angeles, said on the Assembly floor that the education and levee bills represented a partial victory.

"We didn't provide California a full package," he said. "(But) we're going to do the right thing by California."

The attempt to pass the levee and school bonds fell apart because neither Perata nor Senate Republican leader Dick Ackerman of Tustin wanted school bonds approved now.

"There was no urgency here for a school bond," Perata said.

While the bills passed in each house now go to the other chamber, their fate is uncertain and there is no possibility of getting any measure on the June 6 primary election ballot.

Earlier in the day, the state Department of General Services heightened the urgency to settle the matter. The department's director said lawmakers needed to act by midnight Wednesday to ensure that election ballots could be mailed by the May 16 deadline.

Success with the Democrat-controlled Assembly and Senate would have given a boost to Schwarzenegger, who proposed a 10-year, $222 billion public works spending plan in January.

It relied on lawmakers and voters approving $68 billion in borrowing in a series of elections through 2014, an amount that was 41/2 times the largest single bond amount in state history.

Schwarzenegger sought to rebuild the state's highway system, repair its levees, build new schools, upgrade universities, create reservoirs and expand mass transit.

His "strategic growth plan" would have been the most ambitious public works program in California since the 1960s. Getting the plan -- or a part of it -- through the Legislature and onto a ballot had been the centerpiece of his re-election year agenda.

Administration officials said they would continue pushing to add other public works bonds to the November ballot.

But Nunez suggested that lawmakers might have to re-evaluate the idea of trying to put a huge, multi-subject bond measure on the November ballot.

"I couldn't get one single Republican vote on a mega-bond package," he said.

Wednesday's last-minute flurry of activity came after Schwarzenegger and lawmakers had continually pushed back a deadline that the secretary of state's office had originally set as last Friday.

Negotiations had stumbled over exactly how much to put into a bond bill, what projects would be funded and related issues such as whether environmental reviews should be required for levee repairs and highway improvements.

Many Republican and Democratic lawmakers were concerned about the size of Schwarzenegger's original borrowing plan. He later proposed adding another $3.5 billion for levee repairs after he said it was unlikely the federal government would offer substantial financial help.

The governor and lawmakers last week were close to compromising on a bond package that would total about $50 billion, even as they deadlocked over certain details.

Among the most intractable issues was a demand by Republican lawmakers for dams to create one or two new reservoirs, saying California will need more water storage to handle its growing population.

Democrats have refused to support such a plan, instead favoring conservation and underground water storage.

A recent poll found California voters favored Schwarzenegger's proposal to rebuild the state's infrastructure by a 2-to-1 ratio, even though they differed over some of the details.

The setback for Schwarzenegger's signature policy proposal will complicate his bid for re-election. His staff sought a legislative victory on the public works bond plan to help the governor rebound from a disastrous 2005, when voters rejected all four of the government-reform measures he promoted during the special election.

(Copyright 2006 by The Associated Press. All Rights Reserved.)