Despite an upbeat spin from Gov. Arnold Schwarzenegger, it looks like the ambitious multi-billion dollar bond package to pay for public works improvements might be dead—for good.

The $49 billion plan died in the Legislature last week when state lawmakers failed to approve the bond package by a midnight March 15 deadline. “I see a great move forward,” Schwarzenegger said at a Capitol news conference the next day, predicting that he and lawmakers will agree on the infrastructure spending plan for the November ballot.

But if Democrats and Republicans couldn’t agree on a bond package for the June ballot, it’s not clear how—or why—Democrats will move forward with a Schwarzenegger-endorsed plan in November, when he is up for reelection.

“It’s going to be really hard,” says Assembly Budget Committee Chair John Laird, who has been at the center of bond negotiations during the past weeks. “We could put it on the June ballot without the overlay of a governor’s election.”

In fact, Schwarzenegger had significant support from Democrats for his massive proposal. The governor and Democratic leaders had worked hard to negotiate a borrowing plan that would fix levees, expand water projects, relieve clogged roads and highways, build affordable housing and classrooms, increase mass transit lines and create parks.

But Republican lawmakers wouldn’t go along with the expensive bond. Despite intense talks—the governor reportedly pleaded individually with Republicans in Sacramento—Schwarzenegger could not secure enough votes from his own party.

Laird says that lawmakers came close to reaching a deal.

“Since last Wednesday [March 8], the Speaker [Fabian Núñez] and I had five different meetings with the governor, which was probably more than the entire number of meetings I’ve had with him since he was elected governor.

“There were negotiations between the governor and Assembly and Senate Democrats, between Senate and Assembly Democrats and Republicans, and they intensified at the middle of last week. Then last night [March 15], the Senate adjourned early.”

Early means 10pm. The two houses had until midnight to approve the measure.

Late that night, the Assembly approved a smaller bond measure for the June ballot that would have provided about $20 billion for school building projects and $4.1 billion for levee repairs and flood control.

The Senate refused to act on the Assembly’s measures and instead approved $1 billion for levee repairs.

Some Sacramento insiders blame Senate President Pro Tem Don Perata, D-Oakland, for failing to vote on the Assembly’s spending plan. Núñez cancelled his wedding reception on March 10 to stay in Sacramento in an effort to move the bond package; on March 13 the Assembly remained in session until 1am. Meanwhile Perata sent the Senators home at 5pm. But Laird sounds a conciliatory note.

“I think [Perata] was very committed to the transportation bond. And that we [the Assembly] would move levees and education without money for transportation was a big concern to him,” Laird says.