Legislators Fall Short on Restoring Budget Cuts

Legislators hoping to find enough money to restore $283 million in Gov. George Deukmejian’s budget vetoes announced Friday night that they had reached agreement on only half that amount as time ran out on the legislative session.

Legislators from both parties were resigned to the possibility that a handful of politically sensitive health and education programs would not be completely funded.

The governor had warned that he would make the vetoes stick unless the Legislature agreed to use surplus dollars from the investment-rich Public Employees Retirement System pension fund.

“It doesn’t look like we’ll get the issue resolved,” said Senate Republican Leader James W. Nielsen of Rohnert Park as the Legislature headed toward adjournment with negotiators making little progress.

Agree on $147 Million

Nielsen, who met with top Deukmejian Administration and Democratic officials throughout the day, said the negotiators could agree on only about $147 million in funding for the programs.

The agreement calls for gaining $112 million by reducing state contributions to employee retirement accounts. Another $35 million would come from money the state expects to receive as its share of a federal suit against oil companies for overcharges.

The agreement was contained in Senate-passed legislation by Sen. Dan McCorquodale (D-San Jose). The legislation would allow the governor to choose which of the $283 million in vetoed programs to restore.

McCorquodale said he and other legislators hoped the governor would meet them halfway and provide sums in excess of the $147 million from the $1-billion reserve fund in the state’s $37.4-billion budget.

Deukmejian’s Position

Deukmejian so far has steadfastly refused to take the money from the reserve, insisting it is necessary to maintain intact to pay for unforeseen emergencies, such as flood and fire disasters.

But Democrats believe the governor is under as much political pressure to restore the funds as they are, and believe they have an outside chance that he will yield.

“We’re already two months into the fiscal year so, with no other demands on the reserve, we believe he can take the money and still have a healthy enough reserve to get us through the next 10 months,” McCorquodale said.

Pressure to act is coming from local education and county government officials who have been warning legislators that their programs will face deep cuts if the money is not put back into the budget.

The biggest cuts were $112 million in aid to low-wealth urban school districts, $50 million in funding for county health services for the indigent, $34.2 million from community college districts facing declining enrollment, and $64.6 million in various cuts to transportation programs, including special aid to rural counties.

When Deukmejian vetoed the funds in June, he said he would restore the money if the Legislature agreed to make up the $283 million with revenue from the pension fund. But Senate Democrats, allied politically with the California State Employees Assn., which opposed the move, refused to go along.

Alternatives Sought

The legislation has been stymied while negotiators were seeking alternative ways to come up with the full $283 million.

Deukmejian, running for reelection, was criticized Friday by his Democratic opponent, Los Angeles Mayor Tom Bradley, for holding school and health programs “hostage” to force the Legislature to go along with his efforts to finance budget programs with pension fund money.

The mayor was joined in Los Angeles by members of the city school board. Board member John Greenwood said school districts “are the innocent victims of politics in Sacramento.”