Analysis : Despite Passage, Battle Over State Budget Continues

As the new fiscal year gets under way, it is clear that the Legislature’s passage of a new $44.2-billion state budget was not the last word lawmakers will have on spending. It was also abundantly clear that the budget action had some immediate results.

Lights were out and the door was locked at the state Office of Tourism on Friday, the first day of the new fiscal year. Democrats eliminated $8.1 million to run the agency from the final version of the budget that the Assembly and Senate sent to Gov. George Deukmejian on Thursday.

Knowing that the office is one of Deukmejian’s top priorities, Democrats first wiped out the agency, then used a promise to revive it as one of the carrots they hope will entice Deukmejian to support a tax bill that will raise $560 million by speeding up tax payments to the state.

While the tourism office may be revived when the Legislature returns from its July recess in August, for the time being it is legally dead. “It’s closed. If you don’t have a budget, you can’t keep the office open,” said Warren Rashleigh, an information officer for the state Department of Commerce. Rashleigh said those who worked for the Office of Tourism will be given other jobs in the Department of Commerce.

Smaller Issues

Restoring the Office of Tourism is one of the smaller budget issues that was still undecided when lawmakers left Sacramento on Thursday night to begin their summer vacations.

Bigger decisions that will face lawmakers when they return to work in August include whether to restore $350 million in funding for county-administered courts, $84 million in additional financing for the University of California and California State University system, and $80 million cut from the state prison budget by Democratic budget writers.

By delaying a budget vote until last Thursday, lawmakers ensured that the state would begin the new fiscal year without a budget. The state controller does not have the legal authority to pay the state’s bills until Deukmejian signs the spending plan.

Deukmejian is expected to complete his review of the budget by next weekend.

The Republican chief executive began wading into the spending plan Friday morning with officials from the Department of Finance.

Veto Hinted

Later, in a speech to a youth group Friday night, he hinted that he would veto at least $450 million from the budget. Lawmakers fear that figure could double before the governor is finished.

The governor downplayed the damage. “After I veto a very small percentage of the budget, it will still be 6% higher than last year,” he said. “Sometimes leadership is a four-letter word spelled V--E--T--O.”

Many of those who watched the budget drama unfold this year believe that if it had not been for the deadline created by the start of the new budget year, lawmakers most likely would still be fighting. As it was, they missed the California Constitution’s June 15 deadline for passing the budget by two weeks.

Sen. Marian Bergeson (R-Newport Beach), the lead Senate budget negotiator for Republicans, said during Thursday’s debate that the more than $1 billion cut from the budget by an Assembly-Senate conference only served to cloud the fiscal waters.

Budget Assailed

She said the budget approved by the Legislature does not reflect “sound fiscal policy.”

Among her complaints about the $44.2-billion budget is that it does not contain adequate funding for major items like prisons and county courts. She said the budget reserve of about $500 million “is analogous to a family with annual disposable income of $40,000 having only $560 in their checking and savings accounts.”

“Our current budget problems are insoluble without political will and leadership. The dialogue between the branches of government, and within those branches, has almost ceased. The budget process churns on, but no real decisions are made,” she said.

The issues that remain to be resolved have been packaged into one bill, carried by Assemblyman John Vasconcellos (D-San Jose). They have been linked to a tax bill that would bring in $560 million in additional taxes this year by speeding up sales and income tax collections by the state.

The two bills were approved, along with the budget, by the Senate on Thursday. But they fell victim to parliamentary maneuvering by Republicans in the Assembly and will not come up for a vote until August. Even if they had passed, Deukmejian would certainly have vetoed the tax bill.

Vasconcellos Bill

On top of providing additional funding for county-administered trial courts, colleges and universities, prisons and the Office of Tourism, the Vasconcellos bill would provide an extra $10.8 million for student loans and $2 million for the state’s competitive technology program. The bill would also appropriate enough to provide Deukmejian’s resources secretary, Gordon K. Van Vleck, with a 12-month budget, which the conference committee had reduced to six-month’s funding; $12 million for the California Youth Authority, and $1.2 million for veterans service officers.

But the debate on those programs could just be the start. Deukmejian next week will certainly cut deeply into many programs favored by Democrats, which could start a new round of warfare.

Perhaps the single most important item on the list of open budget items is the $350-million county trial court funding proposal.

Larry E. Naake, executive director of the County Supervisors Assn. of California, said in a letter to county officials Friday that “already financially strapped counties that had counted on these funds will have to make additional cuts in their budgets.”

“If this comes to pass,” Naake said, “it will be painful and result in even more program reductions and employee layoffs at the county level.”

Naake said counties will draft their own budgets in July and August. He is advising them not to assume they will get the $350 million in trial court funding. That’s because it is not likely that the Legislature will act until the last two weeks in August. “If we wait that long, and the Legislature fails to act, counties will be worse off than if they act now,” he said.

Of course, the cuts that will result when counties begin drafting their scaled-down budgets will put even more pressure on the Legislature to act.