Deukmejian Calls for 15% Rebate on Tax

Gov. George Deukmejian, preparing to sign a new state budget today, called Monday for a 15% income tax rebate with a maximum of $150 for individuals and $300 for couples.

In a televised address, Deukmejian said he would veto “excessive” spending from the $41.1-billion budget sent him by the Legislature. But he did not specify how much he would cut or which programs he would target.

The governor’s advisers indicated that they hoped the speech would be carried by many TV stations around the state, so Californians would receive his message direct and unfiltered by news reports. They wanted to emphasize Deukmejian’s spending priorities and downplay his vetoes.

Speech Criticized

“We will spend nearly $41 billion on government this year,” Deukmejian said. “This record commitment proves that we stand for opportunity, prosperity, safety and security and for humanity in dealing with our fellow citizens in need.”

However, Democratic leaders and state schools Supt. Bill Honig immediately criticized the governor’s speech for being long on rhetoric and short on specifics about the budget.

“I think the governor is playing a shell game,” Assembly Speaker Willie Brown (D-San Francisco) said in a televised response to Deukmejian. “This governor, in that very nice, glossy speech that he made--well polished, well rehearsed--did not address any of the issues.”

Senate President Pro Tem David A. Roberti (D-Los Angeles) said of Deukmejian’s speech: “The general impression he tried to leave was (that) there are no problems; you don’t have to pay your bills; it’s a free ride and free lunch and Santa Claus is here. That’s just not the case.”

The budget Deukmejian is scheduled to sign today--seven days into the new fiscal year--marks the first time the state has felt the effects of the Proposition 4 spending limit approved by voters in 1979.

Because of the limit, $1.1 billion in state revenues cannot be spent and, without further voter action, must be returned to the taxpayers within two years.

Nevertheless, despite the spending limit and his expected vetoes, the Republican governor said that expenditures for education, AIDS, roads and toxic cleanup will all increase during this new fiscal year.

“We can spend more for schools and still live within Proposition 4--and we are,” Deukmejian said. “We can spend more to fight AIDS, toxics and criminal terror, and still live within Proposition 4--and we are.”

Deukmejian said he will approve $22.4 billion in spending on schools, colleges and universities, an increase of $1 billion over last year.

Honig said after the governor’s speech that this will mean a cut of about $700 million in education spending from the budget sent to him by the Legislature. Of this, Honig estimated, about $400 million will come out of programs for kindergarten through high school.

“That means raising class size,” Honig insisted. “That means eliminating teacher positions. That means low teacher salary increases or no teacher salary increases. That means not buying books.”

The governor also said he will approve $63 million in spending to fight AIDS, which has now afflicted more than 8,700 Californians.

In settling on this amount, Deukmejian accepted $18 million added to the AIDS budget by the Democratic-controlled Legislature, but vetoed another $21 million also added by lawmakers to combat the disease.

Earlier this year, Deukmejian proposed giving $700 million of $1.1 billion in unexpected revenues back to the taxpayers through a 10% state income tax refund with a maximum of $95 for individuals and $190 for couples.

The governor had proposed spending the remaining $400-million surplus on other state programs, including education. Under Proposition 4, that money had to be appropriated before the fiscal year ended on June 30.

However, when the Legislature and the governor were unable to agree on a spending plan before the new fiscal year, the $400 million could no longer be spent and the entire $1.1 billion became available for a tax refund.

In raising the amount of his proposed tax rebate to 15%, Deukmejian repeated his offer to accept contributions from those taxpayers who might wish to give their refund to the state.