Senate Passes $42-Billion Budget Minus Tax Rebate

The state Senate voted Thursday to approve a $42-billion version of Gov. George Deukmejian’s budget designed to derail the governor’s plan for a $700-million tax rebate and calling for a virtual ban on state-funded abortions for poor women.

On a 34-3 vote, the budget was sent to the Assembly, which is expected to reject it and pave the way for a two-house conference committee to write the spending plan the Legislature will send to Deukmejian.

As it stands, the budget beefs up Deukmejian’s spending program by $1.2 billion and is more than $1 billion higher than a lower-house version of the budget that is awaiting a vote in the Assembly.

But members of both parties said they expect the budget to be scaled down once negotiators from the Senate and Assembly sit down to iron out differences in the upper- and lower-house versions.

Virtual Agreement

With lawmakers in virtual agreement on the need for weeks of further negotiations on key budget issues, the most emotional debate Thursday centered on whether state funds will be used to pay for abortions for poor women.

A coalition of pro-life Democrats and Republicans won approval on a 19-17 vote of an amendment aimed at limiting abortions under the Medi-Cal program to cases where pregnancies result from rape or incest or where the life of the mother is endangered. Opponents of the measure claim that the provision would rule out 95% of the abortions now allowed under Medi-Cal.

The anti-abortion amendment has become a standard, if controversial, feature of state budgets in recent years. Lawmakers who favor allowing Medi-Cal abortions put up only token opposition because for eight years in a row, state appellate courts ruled the amendment unconstitutional.

This year, however, the political climate is different because the Supreme Court, now controlled by conservative Deukmejian appointees, has yet to rule on the issue and many pro-choice advocates do not want to test the new court.

Sen. Diane Watson (D-Los Angeles) angrily declared that the Senate in effect was telling poor women on welfare “we are going to force you to have a child.”

But Sen. Joseph B. Montoya (D-Whittier), who introduced the amendment, argued successfully that it was entirely appropriate for the state to decide not to spend taxpayers’ money on something many Californians find morally objectionable.

Unexpected Outlays

The budget approved by the Senate does not include a $1-billion reserve that Deukmejian insists be maintained for unexpected expenditures that develop later in the fiscal year, which runs from July 1 to June 30, 1988.

Sen. Alfred E. Alquist (D-San Jose), chairman of the Senate Budget and Fiscal Review Committee and author of the spending plan, said, “I will not be satisfied with less than a reserve of $1 billion.”

Perhaps the most troublesome issue is what the Senate will ultimately do about the governor’s proposal to give taxpayers a $700-million tax rebate.

The floor debate Thursday indicated that senators are still far from agreement on the tax rebate or how to deal with the limit on state spending approved by voters in 1979.

Deukmejian envisions a surplus of $700 million by June 30, which he contends must be returned to taxpayers under terms of the 1979 initiative creating the spending limit.

Alquist and other Democrats disagree with the governor’s interpretation of the law and added an amendment to the budget saying that it is the intent of the Legislature to stop the tax rebate and spend the $700 million on education and county programs.

The approach will require passage of separate legislation, but the budget approved Thursday anticipates that the money will be spent on programs and not on the rebate.

Earlier in the day, Alquist’s committee blocked passage of legislation aimed at implementing a key part of the governor’s program to deal with the surplus.

The governor’s bill, carried by Sen. Marian Bergeson (R-Newport Beach), actually anticipates a potential $1.1-billion surplus. But it calls for the state to shift $400 million of the potential surplus to education programs.

If the Legislature does not enact Bergeson’s bill by June 30, or come up with an alternative plan to legally spend the money, the tax rebate could grow to $1.1 billion.