Panel Passes $44.2-Billion State Budget

Legislative budget negotiators passed a slimmed-down $44.2-billion version of the state budget Tuesday after reaching a shaky compromise on cuts to reduce it by more than $1 billion.

The action paves the way for votes on the spending plan later this week by the full Assembly and Senate.

The six-member conference committee, after some superheated partisan rhetoric over the impact of the spending cuts, approved the budget 4 to 2.

The biggest reductions were in appropriations for public schools, prisons, state colleges and universities, job training for welfare recipients, and counties.

As it stands, the committee-approved budget is about $300 million lower than $44.5-billion budget submitted to the Legislature in January by Gov. George Deukmejian.

It marks the first time since Deukmejian took office in 1983 that Democrats have seized the initiative from the governor and reduced the budget themselves. In past years, they have sent Deukmejian fatter budgets and let the governor cut them back.

Many of the budget cuts made by the Democratic-controlled conference committee were in items strongly supported by the Republican governor. As a result, Deukmejian is expected to make additional cuts in programs favored by the Democrats.

That would assure additional debate, when the Legislature returns from its summer recess, over restoration of programs that were cut from the budget.

Although final figures are still not available, it appears that the proposed budget will increase spending over the current year by more than $2 billion, or by at least 6%.

Republicans believe that is an adequate increase, but Democrats argue that the increase is not large enough to take care of all of the increasing demands on state government.

Assemblyman John Vasconcellos (D-San Clara), chairman of the conference committee, said voting for the scaled-down budget was “the most dreadful experience” he has had in 12 years of sitting on budget committees. Blaming the cuts on the governor, he called the era “Deukmejian’s dark ages.”

Drafting Legislation

Anticipating budget vetoes by Deukmejian, Democrats are preparing tax legislation designed to raise $550 million in new revenues by speeding up income and sales tax collections.

Democrats are calling the proposals sponsored by Assemblyman Phillip Isenberg (D-Sacramento) “revenue enhancements,” arguing that it is not a tax increase because rather than raising tax rates, the proposal would require earlier payment of taxes already owed.

Deukmejian has promised to veto a tax increase or any measure that is perceived as a tax increase, and some Republicans believe the Democrats’ plan will not pass the governor’s test.

Assembly Republican Leader Pat Nolan of Glendale said, “The revenue package includes tax increases. There is no way that we or the governor will accept that.”

Hoping to make the tax proposal more attractive, Democrats say they are writing legislation that will require the revenue increases and linking the legislation to some of the conference committee’s larger budget cuts.

Democrats said they will bring the tax legislation up for a vote Thursday, the same day the budget will be voted on.

‘Need a Tax Increase’

“I think we need a tax increase,” Vasconcellos said, still angry about Deukmejian’s about face on an $800-million tax increase plan. Deukmejian proposed the tax legislation in late May, then withdrew it within weeks because of political opposition.

One of the “no” votes on the budget was cast by Assemblywoman Maxine Waters (D-Los Angeles), who expressed strong objections to elimination from the budget of a $350-million trial court funding package that counties had been promised by Deukmejian. Basically, Deukmejian had agreed that the state would pick up the cost of the court system to relieve financial pressure on the counties.

Waters said: “Many (counties) planned their budgets with the expectations that they would get the buyout from the state . . . Counties must be shaking in their boots wondering what they are going to do.”

Larry Naake, executive director of the County Supervisors Assn., said, “It’s a promise not kept again by the state. It’s just indicative of the relationship between the state and the counties that continues to exist.”

Impact Foreseen

Naake said the budget reduction could lead some counties to close libraries, lay off sheriffs deputies, shut down parks and fire houses and delay road and highway improvements.

In one of its last actions, the committee restored nearly half the money it had cut from the state Resources Agency. The earlier cut would have wiped out the entire agency, including the job of Resources Secretary Gordon K. Van Vleck, a Deukmejian cabinet member. The committee voted to cut the department’s budget 6%, and fund the agency for six months, meaning that separate legislation will be required to keep the operation going for a full 12 months.