Governor Defends Plan for Income Tax Rebate

Gov. George Deukmejian defended his $700-million tax rebate proposal against increasing attacks from political opponents Friday, saying that “taxpayers deserve it and the law requires it.”

Deukmejian also angrily criticized his chief opponent, state Supt. of Public Instruction Bill Honig, during a Capitol news conference, declaring that he will refuse any further face-to-face meetings with the schools chief because Honig is “spreading falsehoods” and not “acting in good faith.”

The core of the dispute over the tax rebate is whether the $700 million in surplus money should go back to taxpayers, in keeping with a provision of the California Constitution overwhelmingly approved by voters in 1979, or whether it should be used to increase spending on public schools, as Democratic lawmakers and Honig want.

Voters to Decide

Honig said he is prepared to ask California voters whether they would rather put the $700 million into school programs or their pockets. State officials said a one-time income tax rebate of that magnitude would average out to about $50 for individuals and $100 for couples.

Speaking to reporters shortly after Deukmejian finished his news conference, Honig declared that the governor is “out of touch with the facts” in sizing up the school funding problem.

“We are going to ask the Legislature not to send (the $700-million rebate) back to taxpayers but hold it,” Honig said.

Deukmejian told reporters that he had no legal choice but to return the $700 million to taxpayers. But he also said it was “fair.”

The ‘Budget Busters’

The Republican governor called his critics “budget busters.”

“Taxpayers seem to be at the very bottom of their list of priorities,” the governor said.

Deukmejian said Honig and other opponents of the rebate want to “circumvent” the voter-approved 1979 initiative measure, which imposed a spending limit on government agencies, including the state, and requires that any budget surpluses be returned to taxpayers.

“Implementing that initiative measure by providing a $700-million rebate is not a matter of choice. It’s a matter of law,” Deukmejian said. “State government will spend nearly $41 billion this next fiscal year. That’s nearly 60 times what we propose giving back to the people. A $700-million rebate to the people who pay the bills in our society is in my view fair.”

The governor noted that with his recent amendments to the $40.8-billion proposed state budget, spending will increase for kindergarten through 12th-grade programs by $758 million during the next fiscal year, which begins July 1. That amounts to a 4.9% increase and will bring total state spending on kindergarten through 12th grade to $16.3 billion.

Complaint With Schools

Repeating his claim that California’s public schools are badly mismanaged, Deukmejian said he is in the preliminary process of setting up a fact-finding group to conduct a “thorough review” of public school finances.

Deukmejian said that Honig’s plea for more money for public schools, as well as horror stories that schools are so short of money that they can’t afford to buy textbooks and finance other improvements, “make it quite obvious that something is wrong” because he has put record spending increases into school programs.

“There’s no doubt in my mind that there are a lot of school districts that have not been managed properly. They are not using their money properly,” Deukmejian said.

Asked if he would meet privately with Honig, as he did in January, to discuss their differences, the governor said the schools chief had requested a meeting but “I have no interest in meeting with him.”

Stirring Up Trouble

Deukmejian said Honig, who has organized a statewide political action committee to press for more school funding, is “just trying to organize a lot of people, stir up a lot of confrontation.”

He accused Honig of “shooting from the lip.”

At one point, Deukmejian said of Honig: “He claims if he doesn’t get another $1 billion, the children are going to be morons. That is absolutely ridiculous.” Deukmejian quickly backed off the statement, saying he was not quoting Honig directly.

Honig already has begun an initiative campaign to substantially amend the 1979 spending limit, and the schools chief said Friday that the central issue he will ask voters in the June, 1988, initiative campaign is whether they’d rather have the $50 rebate or put the money into school programs.

Thinks Voters Agree

Honig said he thinks voters are with him--and he also predicted that the $700 million tax rebate plan would be blocked in the Legislature.

“The rebate is not going to go in place. I don’t think there is a majority in the Legislature that will vote to give $50 back to an individual taxpayer and jeopardize the schools,” Honig said.

Honig said the rebate would amount to about $4 a month for the average taxpayer, only enough for “a night on the town or a couple of ties or a couple of six packs of beer a month.” He said, “Most people are going to say that’s crazy.”

In another development, Assemblyman John Vasconcellos (D-Santa Clara), chairman of the Assembly Ways and Means Committee, announced that he plans to propose that the $700 million be split between public schools ($550 million) and community colleges ($150 million).