Rival Budgets Far Exceed Governor’s Spending Plan

Democratic-controlled budget committees in the Senate and Assembly, basically ignoring Gov. George Deukmejian’s fiscal rescue plan, approved rival versions of the state budget Tuesday that far exceed the spending called for in the governor’s proposed $44.5-billion budget.

The Senate version tops Deukmejian’s spending plan by $417 million and the Assembly proposal exceeds it by $490 million. Those figures contrast sharply with the $450 million in budget cuts proposed by Deukmejian.

The two versions of the budget, heading for floor votes later this week, will form the basis of negotiations by a two-house conference committee that will begin deliberations next week after the primary election.

Negotiating Tactic

Because they are preliminary versions of the budget that the Legislature will ultimately adopt, the rival spending plans usually come in on the high side to give lawmakers some negotiating room.

But even so, the budgets approved by the two committees represent major differences of opinion between Democrats in the Legislature and Deukmejian over the best way to deal with a $2.3-billion revenue shortfall and--because of that--could mean a prolonged and potentially nasty budget fight.

Deukmejian has proposed a combination of budget cuts and tax increases to deal with the revenue shortfall.

About the only thing the committees appeared to agree with the governor on are the tax increases.

Both the Assembly’s spending plan and the Senate’s assume that the Legislature will approve Deukmejian’s proposal to raise corporate and individual taxes by $800 million.

Beyond that, the differences are substantial.

Emergency Fund

One of the areas that Deukmejian proposes to reduce is the reserve fund that he sets aside each year to cover fiscal emergencies, like fires, floods, or, as happened this year, sudden drops in revenue.

Originally, Deukmejian said he wanted to appropriate $1.1 billion for the reserve. Then, after the $2.3-billion revenue gap was discovered, Deukmejian proposed reducing the reserve to $600 million. The Assembly’s version of the budget calls for a $112-million reserve; the Senate’s, $180 million.

Deukmejian also proposed reducing planned increases in monthly payments to welfare recipients by about half, thus saving the state $54.5 million. Neither legislative version of the budget calls for the cut.

The two legislative committees also basically ignored Deukmejian’s proposal to cut operating budgets of nearly all state departments by 2%.

The committees in both houses restored funds to the budget to finance abortions for poor women. The money, about $13 million, was eliminated by Deukmejian.

Though not related to Deukmejian’s budget-balancing plan, both legislative budgets also would restore $11 million to reinstitute the state’s worker safety program, Cal/OSHA, which Deukmejian virtually eliminated from the budget last year.

Some of the other budget changes proposed by the committees would bolster AIDS research and treatment programs ($42 million), raise wages of nursing home workers ($15 million), increase spending on community mental health programs ($25 million), provide extra money to purchase textbooks for public schools ($10 million), bolster programs involving research and treatment for Alzheimer’s disease ($10 million), and provide $15.5 million more in prenatal care programs for women receiving state financial support.

Deukmejian Press Secretary Kevin Brett said after the voting:

“We are not surprised that the majority on the budget committees is loading up the budget. That happens every year. The governor is fully prepared to once again control spending by using his trusty blue pencils (veto authority).”

Party-Line Vote

Voting on the Assembly Ways and Means Committee was basically along party lines, with Democrats ignoring Republican opposition.

Assembly Republicans, though, said the fight is not over. They said they hope to amend the budget on the floor, getting the necessary 41 votes they need by enlisting the help of five dissident Democrats known as the “Gang of Five.”

One of the rebel Democrats, Assemblyman Rusty Areias (D-Los Banos), said he and other gang members had not discussed specific budget proposals. But, he added, “We plan to play a role in the process.

“We are concerned about the solvency of the state. We will be looking at the Democrat proposal, we will be looking at the Republican proposal, and whichever one makes the most sense is the one which we will embrace,” Areias said.

Assemblyman John Vasconcellos (D-San Jose), chairman of the Ways and Means Committee, said most of the money added back to the budget is in the area of health and welfare. He said cutting health and welfare programs for the needy is shortsighted because society eventually will be forced to pay the bills if babies are born prematurely, if children suffer from a lack of proper nutrition, or if an answer to the spread of acquired immune deficiency syndrome is not found.

Later Costs

“There are some needs of the state that have to be met and if we don’t pay them now we are going to pay twice as much or 10 times as much later,” he said.

Assemblyman Burt Margolin (D-Los Angeles), a Ways and Means member who introduced the amendment restoring the funds that Deukmejian would cut from welfare benefits, said: “The reduction proposed by the governor would have made only a very small difference in terms of the overall budget picture and it would have had, at the same time, a major impact on the lives of these small families with dependent children who qualify for this money. We are talking about money that they pay for their food and their rent.”

On the Senate side, Sen. Nicholas C. Petris (D-Oakland) said that if there is not enough money to pay for the proposed increases in spending then “we ought to increase taxes.”

Sen. Alfred E. Alquist (D-San Jose), chairman of the Senate Budget Committee, said the Senate’s higher budget “reflects the growing intensity of problems facing our state.”

At one point, he got into an argument with Sen. Art Torres (D-Los Angeles) over a motion by Torres to leave the University of California’s budget open so that Torres and other lawmakers can have leverage in talks with UCLA administrators about racial tensions on the Westwood campus.

Alquist fought the proposal, saying that “no ethnic group is ever going to be satisfied that they are being treated fairly.”

Torres, who eventually got Alquist to vote for his motion, shot back, “We think we are treated fairly like any other group when we are being treated fairly.”

Torres said, “The only way we can exert leverage in public policy is by utilizing the almighty dollar.”