Democratic state lawmakers are pushing Gov. Jerry Brown to accept higher revenue projections in order to restore services.
As budget talks enter the final week, a key disagreement has emerged over the size of the 2014-15 spending plan that begins July 1.
Brown's administration is using a more conservative revenue estimate for a $107.8 billion general fund and warns against paying for new programs with temporary tax revenue. Lawmakers want to use figures from the Legislative Analyst's Office, which predicts the state will collect $2.5 billion more.
They have agreed to a rainy day fund and paying down liabilities for teachers' pensions. But lawmakers want to reverse health and welfare cuts and fund preschool for low-income students.
Lawmakers face a June 15 constitutional deadline to pass a balanced budget.