Committee OKs Budget Plan; Tax Rebate Ignored

The Assembly Ways and Means Committee approved and sent to the floor a nearly $41-billion state budget Wednesday even though committee members said major issues remain unresolved.

The preliminary budget for the new fiscal year that will begin July 1 was approved on a 14-3 vote. Members of the committee agreed to move the spending plan knowing that the unresolved issues will be dealt with during weeks of negotiation and compromise that lie ahead.

Assemblyman John Vasconcellos (D-Santa Clara), the committee chairman, said the bill “is similar to the governor’s budget” with no “enormous differences.”

The spending plan is about $1 billion less than a $41.9-billion version of the budget approved Tuesday by the Senate Budget and Fiscal Review Committee.

Differences between the Assembly and Senate versions of the budget range over a broad spectrum of health, welfare, education and other programs.

The two conflicting versions of the budget are scheduled for votes in their respective houses within a week. Then they will move into a two-house conference committee, where three lawmakers each from the Senate and Assembly will negotiate a compromise spending plan.

Dozens of Votes

Vasconcellos said he did not even know the exact size of the budget approved by his committee, but guessed it was within $100 million of the governor’s spending plan. The budget was approved after the committee had taken dozens of votes on separate segments of the bill.

A major difference between the Assembly and Senate budgets involves Gov. George Deukmejian’s proposal to give a $700-million rebate to state taxpayers. The $700 million is part of $2.7 billion in unexpected revenues that budget officials say will accumulate in the state treasury over the next 14 months.

Deukmejian recommended that the bulk of the new revenues be used to increase spending on education, health, welfare and other programs during the current and upcoming budget years. But he said the $700 million had to be returned to taxpayers under a voter-approved 1979 state constitutional amendment that limits government spending.

Senate Democrats dispute the governor’s interpretation of the spending limit and proposed giving the $700 million to school districts and local governments. The budget approved by the Assembly committee did not address the tax rebate issue.

Vasconcellos, who earlier said he would like to spend the $700 million on education programs, told reporters that the tax rebate issue probably will be dealt with in separate legislation.

The lawmaker said the extra $2.7 billion in revenues made the committee’s work much easier. “Having more money makes it easier for us to come together,” the committee chairman said.

$906.9-Million Reserve

Vasconcellos said the lower house version of the 1987-88 budget envisions a reserve of $906.9 million. The Senate budget foresees a $775 million reserve. Deukmejian wants the reserve to total $1.06 billion and insists that he will not settle for a dollar less.

Like the Senate version, the Assembly budget provides full funding for the state’s worker safety program, Cal/OSHA, and rejects Deukmejian’s proposal to shift responsibility for more than $900 million in health and welfare programs to counties.

Before the vote on the main budget bill, the Ways and Means Committee voted 15 to 0 to approve Deukmejian-backed legislation that will increase spending another $311.8 million this year to pay for what the governor described as “unexpected bills” that have accumulated, for the most part, in health, welfare and prison programs.