Democrats Are ‘on the Road to Tax Increase,’ Deukmejian Charges

Gov. George Deukmejian, in a harsh attack on critics of his budget, charged Thursday that Democrats in the Legislature who have repeatedly rejected his plan for a $700-million tax rebate are laying the groundwork for a tax increase as early as next year.

Democratic leaders vigorously denied the accusation.

Striking a defiant pose, the Republican governor also said he has no intention of doing anything to resolve the current budget stalemate, even if that means beginning the new fiscal year on July 1 without a spending plan.

“We’ve done all of the compromising, and we are carrying out the will of the people,” Deukmejian told reporters after a speech to an American Legion Boys State convention. “The Democratic majority is just trying to do what they’ve always done, which is to spend everything and spend more than what should be wisely spent.”

Leaders Responded

Earlier, the governor complimented Republicans in the Assembly for refusing to vote on a budget until a rebate plan is passed. Then, turning his attention to Democrats in the Legislature, he said, “Like their colleagues back in Washington who are proposing tax increases, the Democratic legislators here are on the road to a tax increase.”

The Legislature’s top Democratic leaders responded by disavowing any plan to raise taxes and accusing the governor of abdicating his role by failing to compromise on the rebate question.

Assembly Speaker Willie Brown of San Francisco labeled Deukmejian’s statements “the strangest convolution of apparent reality I have ever heard.”

Senate President Pro Tem David A. Roberti of Los Angeles declared: “We don’t have any plan to raise taxes. We’re opposed to raising taxes.

“The issue is whether the governor can shake down the Legislature to do what he wants, to create a rubber stamp,” Roberti added. “It’s just not a democratic government, and we’re not going to go along.”

The bitter exchange between both sides came as the budget deadlock ground into its 10th day with little indication of a resolution before the end of the fiscal year.

The Senate earlier this week voted to approve a budget after several Republicans broke ranks with the governor. But Assembly Republicans are refusing to vote on the spending plan until Democrats first pass a bill to return the $700-million surplus to taxpayers.

Spending Limit

Deukmejian contends that the rebate is required under provisions of a voter-approved constitutional spending limit. The Democratic leadership, however, believes that there is more flexibility in the law.

Meanwhile, state Controller Gray Davis warned Thursday that if a budget is not approved by the June 30 close of the fiscal year, he will have no legal authority to pay the state’s share of Social Security supplemental income payments to aged, blind and disabled people.

A spokeswoman for Davis said those who receive the supplemental aid could see their $560 monthly checks cut in half if the controller can not send the federal government the $152-million check due July 1. The state’s share is a supplement to a basic grant provided by the federal government, so it is expected that the checks would continue, although at lower amounts. Regular Social Security payments would not be affected.

Davis said the next big group to feel the impact of the fiscal stalemate would be doctors, hospitals and others who provide services to Medi-Cal patients. Davis said state employees will receive their checks as scheduled July 1 but only because the paychecks cover services provided for June, the current fiscal year.

The Legislature has often been late in approving budgets. Even though the state Constitution requires the Legislature to approve a budget by June 15, there are no penalties if lawmakers miss the deadline, and the budget has been late five of the last 10 years. The record was set in 1983, when the Legislature did not approve a state budget until it was 19 days into the new fiscal year.

Deukmejian’s charge that Democrats in the Legislature are moving toward a tax increase were reminiscent of a statement the governor made during his 1986 relection campaign, when he said his opponent, Mayor Tom Bradley, had a “secret plan” to raise taxes.

In the current case, Deukmejian said that Democrats want to spend the state surplus and are making efforts to modify the constitutional spending limit.

“If we spend this one-time revenue windfall,” Deukmejian said of the surplus, “then next year, the money is not going to be there and there is either going to have to be a cut in vital programs or a tax increase. And of course, based on (the Democrats’) record of the past, they will be calling for tax increases.”

Paul Gann, the author of the 1979 spending-limit initiative, applauded the governor for insisting that the Legislature pass the tax rebate before the budget.

Gann, a Republican who heads a group called the Proposition 4 Watchdog Coalition, said at a Capitol news conference that Democrats who want to spend the entire surplus on education and other government programs are violating “the spirit” of the 1979 constitutional amendment.