$35.3-Billion State Budget Approved, Sent to Governor

The Legislature approved and sent to Gov. George Deukmejian a $35.3-billion state budget Thursday that contains a Democratic-backed pension policy targeted against apartheid in South Africa.

Republicans in both the Assembly and Senate spoke out against the anti-apartheid provision, but in the end joined Democrats in giving the budget enough votes to send it to Republican Deukmejian.

The Senate voted 33 to 6 for the spending plan, which would increase spending over the current year by $3.6 billion, or 11.3%. A few hours later, the Assembly passed it on a vote of 54 to 26, the exact two-thirds majority necessary.

Meet With Governor

The final votes came after GOP leaders met privately with Deukmejian in the governor’s office to discuss budget provisions aimed at restricting state pension fund investments in companies doing business with the Republic of South Africa.

Republican leaders had gone into the meeting hoping to get a promise from Deukmejian that he would veto the South Africa provision. Deukmejian reportedly was noncommittal but did tell the Republican legislators he wanted them to send him the budget.

“He said vote it the way you see it and that he would decide when it gets to him,” said Assembly Minority Leader Pat Nolan (R-Glendale) of the conference with Deukmejian.

Under the budget provision, public pension fund trustees would be required to adopt a policy restricting new investments in companies that do business with the white government of South Africa. Trustees would also be required to sell off pension fund investments in companies that contract with the South African military or provide goods or services that enable that government to enforce its policy of racial separation. Such equipment could include computers used to monitor the movement of South Africa’s black population.

Not Legally Binding?

Shortly before the vote, Republicans circulated a legal opinion from Legislative Counsel Bion M. Gregory saying that the way the apartheid provision was drafted it would not be legally binding on the governing boards of state pension funds.

The opinion said the policy raised constitutional questions. One is the state Constitution’s rule that legislation deal with a “single subject.” Another is whether the provision violates the independent authority given pension fund administrators under the Constitution.

Watered-Down Version

The proposal represented a watered-down version of a tougher plan that had called for outright divestment of pension fund investments in companies that do business in South Africa.

Even so, Assembly Speaker Willie Brown (D-San Francisco) argued emotionally for the provision, calling it “only a simple, symbolic statement.”

But Republicans saw more teeth in it.

Assemblyman William P. Baker (R-Danville), one of the chief GOP budget negotiators, said, “We are trying to interfere with the investment practices” of the state’s pension funds.

Baker said selling off securities in companies that do business with South Africa would be costly. “We have a fiduciary responsibility, not to world peace, but to those people who are retirees (with state pension systems),” he said.

Debate in the Senate included a second emotional issue--abortion.

Republicans, angry that a two-house conference committee had rejected a proposal designed to stop the flow of state money into organizations that advertise or promote abortions, made a futile effort to reconvene the committee to deal with the abortion and apartheid issues.

The move was defeated easily by Democrats.

Senate President Pro Tem David A. Roberti (D-Los Angeles) argued that feelings about the two issues ran so strong on both sides that reconvening the committee would be like “walking into a mine field,” and could jeopardize passage of the budget.

Angry Chairman

Republicans relented after Sen. Alfred E. Alquist (D-San Jose), who chaired the conference committee, angrily demanded that GOP leaders “dispense with this nonsense.”

In contrast to the bitter dialogue and prolonged floor fights of the past, passage of the budget came relatively easily--principally because a robust economy has substantially increased state revenues.

The action on the budget came two days before the Legislature’s constitutional deadline to get the budget to the governor. Deukmejian must sign it by the July 1 start of the new fiscal year.

Republicans in both houses said they voted for the budget with the understanding that Deukmejian would make major vetoes in the spending plan. Over the last two years, Deukmejian has vetoed more than $2 billion in spending bills sent to him by the Legislature.

The budget, as it left the Legislature after months of hearings and intense negotiations, is $700 million to $800 million more than the governor first proposed in January.

As it stands, the budget raises spending for state employee pay, child care and education programs from elementary schools up to the University of California. It also provides substantial budget increases for dozens of housing, mental health, nursing home and state-supported medical programs.

Toxic Waste Cleanup

The budget proposal also increases spending for toxic waste cleanup programs, including $7.5 million to help reduce selenium contamination that has threatened water quality in the San Joaquin Valley.

Republicans supported many of the increases, but said the overall size of the budget was higher than they wanted. They said it spent all of the state’s money, and left no cushion should there be a downturn in the economy.

But Assemblyman John Vasconcellos (D-San Jose), chairman of the Ways and Means Committee, replied that the proposal contained the $1-billion reserve that Deukmejian demanded as a contingency against unforeseen budget demands.

He called the budget “sound, balanced and healthy.”

Republican Baker said the budget was shaky. “I hope the governor will reinforce us and veto out the additional $800 million,” he said.

Assembly GOP Leader Nolan claimed that budget writers had added so much new spending to the budget that it was balanced “through smoke and mirrors.”

DIFFERENCES OVER THE BUDGET

Here are key differences between the $35.3-billion state budget approved by the Legislature and the $34.6-billion spending plan submitted by Gov. George Deukmejian. The Legislature’s version:

Community Colleges. Boosts funds by $97.5 million above the amount recommended by the governor.

South Africa. Contains a landmark provision to restrict pension fund investments in companies doing business with South Africa.

State Employees. Grants a 7.5% pay raise, 1% more than proposed by governor.

Education. Adds $150 million to the governor’s request for elementary and high school programs.

Comparable Worth. Provides $31.5 million to close the gap in pay between men and women holding state jobs of “comparable worth.”

Desegregation. Excludes $216 million sought by the governor to defray school districts’ costs of desegregation programs.

Toxic Waste. Cuts $93 million in toxic cleanup bond funds requested by the governor.

Child Care. Sets aside $60 million for child-care programs, which the governor had not requested.

Homeless. Furnishes an additional $45.5 million for housing programs for the homeless and low-income people.

Medical Care. Appropriates an additional $50 million for county programs for the medically indigent.

Jobs. Places 2,076 state jobs back in the budget.