Under the headline “interesting but largely unnoticed news” this week, Senate Democrats balked at a plan to reimburse counties for the cost of the 2005 special election called by Governor Schwarzenegger.

AB 1634, by Assemblymember Kevin McCarthy (R-Bakersfield) would allow the counties to recoup a combined $38.8 million in costs they racked up to conduct the October 2005 election that saw all 8 initiatives on the ballot, including the governor’s 4 pet measures, go down to defeat. Back in April, legislators approved and Schwarzenegger signed a $9 million reimbursement plan.

But that was for state elections costs, not local costs. The California Association of Counties (CSAC) estimates costs for the 58 counties ranging from $3300 in rural Alpine County to a whopping $17.6 million in Los Angeles County.

On Monday, the proposal was placed in the Legislative limbo status of the “suspense file” by the Senate Appropriations Committee. Those who were in attendance say Democrats left the impression that they want to force the governor to deal with the IOU as part of the ongoing budget negotiations. Perhaps that would force Schwarzenegger to publicly acknowledge that it was his special election that cost taxpayers almost $39 million.

But top-level Senate staffers say the committee action was merely protocol, and that all legislation costing a significant amount of money goes to the suspense file until the state’s fiscal abilities and priorities are sorted out.

Meantime, local government officials say they are still waiting.