$37-Billion State Budget to Be Offered by Governor

Gov. George Deukmejian will propose next week a $37-billion state budget for 1986-87 that will emphasize education, business and job development, public safety and toxics cleanup and leave the treasury with a $1-billion reserve for emergencies, Administration sources said Thursday.

Although he would not discuss specific dollar amounts, Deukmejian’s chief of staff, Steven A. Merksamer, said the proposal would “mark another step in a dramatic comeback for California” from 1983, when Deukmejian took office facing a $1.5-billion deficit.

“It’s a completion of the transformation of priorities that has taken place over the last three years,” Merksamer said. “When the governor was elected, we had some of the highest welfare budgets of any state in the country, but we were one of the lowest spenders in terms of education.”

The figure of about $37 billion represents a modest increase over the current fiscal year budget of $34.8 billion. And, as Merksamer described the proposal, which will be formally presented to the Legislature on Jan. 10, there will be few surprises.

Deukmejian’s plan would allow only a small increase in the overall size of the state bureaucracy, adding employees to programs favored by the Administration while eliminating positions elsewhere in government.

Substantial Boosts

In past years, the state’s hazardous waste cleanup proposals have received substantial boosts in staff and money, to some extent at the expense of other health-related programs. Democratic lawmakers have charged that in toxics cleanup, as in other Administration priority areas, the Republican governor has not done enough to address significant problems.

Last year, auditors from the U.S. Environmental Protection Agency sharply criticized the state’s handling of federal money for cleaning up several of the worst hazardous waste sites in California, and the FBI is investigating the state’s management of cleanup contracts.

In recent weeks, the Administration has brought in new staff to run the Department of Health Services toxics division and has named a task force to propose alternative ways of disposing of hazardous waste.

Merksamer said the task force’s findings, due by May 1, could mean even more money for toxics programs than the amount included in the budget proposal to be released next week.

The submission of the governor’s budget proposal is only the first step in a long process. Under the state Constitution, the Legislature will have until June 15 to pass a budget, and the governor is then free to trim the lawmakers’ spending plan. Last year, Deukmejian used his veto powers to cut $500 million from a $35.3-billion budget passed by the Legislature.