Deukmejian Halves Package of Aid Bills

Gov. George Deukmejian on Friday signed legislation to finance until January important programs for schools, the disabled, medical aid for the working poor and welfare services for children. But he told the Legislature it must find the money to continue the programs thereafter.

In doing so, the Republican governor prolonged the election-year controversy with Democrats and public employee unions over his plan to spend about $300 million in “surplus” pension funds to fully finance the programs for the rest of the fiscal year.

Before signing two major bills designed to restore funds that he had vetoed last June from the state’s $37.4-billion budget, Deukmejian reduced the appropriations by half, thus providing state money needed to finance the programs only from last July 1 until Dec. 31.

“When the 1987 Legislature convenes (on Dec. 1), it is my intention to seek the remaining one-half of these funds,” the governor said in a statement.

Retirement Funds

The money would finance the programs for the first half of 1987, but the process of appropriating it will probably revive the fight over the use of the public employee retirement funds.

Deukmejian has jealously guarded the state’s $1-billion surplus against encroachment and adamantly refuses to dip into it for anything but unforeseen emergencies such as fire and floods.

He said that because the Legislature failed to finance the programs with the retirement funds, “I am obligated to make these reductions in order to protect California’s fiscal integrity.”

Under heavy pressure from schools and local governments, the Legislature earlier this month scrounged around, raided a few cookie jars and sent Deukmejian legislation aimed at restoring about $264 million of the $283 million he vetoed from the budget.

Emergency Shelter

One bill, by Assemblyman Richard Robinson (D-Garden Grove), was intended to restore $67.6 million for programs for the in-home disabled; welfare services, such as emergency shelter for homeless children, and county-administered medical aid for the working poor. Deukmejian reduced the sum to $33.8 million.

He also cut from $106.7 million to $53.3 million a bill by Sen. Barry Keene (D-Benicia) for transportation costs of small school districts; special financial help to urban school districts with high concentrations of low-income, bilingual and minority students, and cost-of-living adjustments for education.

As part of the program restoration package, the Democratic-dominated Legislature also approved a $56.2-million bill for community colleges. Deukmejian has not yet acted on that measure.

In an action separate from the pension fund controversy, the governor on Friday signed a $35-million measure by Keene to assist 25 transit projects statewide, except for the Los Angeles Metro Rail. Deukmejian had proposed $6 million for Metro Rail in January, but eliminated the funds in May because of a drastic reduction in gasoline tax revenues.

The new transit aid will be financed from awards resulting from recent settlement of federal lawsuits against oil companies. The funds were set aside in a special account and can be used only for transportation projects.

Deukmejian has charged that Democrats, chiefly in the Senate, reneged on a deal reached last summer when the Legislature approved the state budget. He maintains that Democratic leaders agreed to approve a separate bill that would finance about $300 million in extra spending with surplus employee pension funds.

However, public employee unions complained and exerted pressure on Senate Democrats to find other means to balance the budget. Democrats stood fast and Deukmejian vetoed $283 million from the spending program with the promise to restore the sum if the lawmakers found acceptable alternative sources of revenue.