Key Democrat Acts to Kill State Spending Limit

A week after Gov. George Deukmejian said he would consider supporting efforts to amend the state spending limit, the Democratic chairman of the Assembly Revenue and Taxation Committee introduced legislation Thursday calling for its repeal.

Assemblyman Johan Klehs (D-San Leandro), noting that Deukmejian had opened the door last week to possible repeal of the limit, said, “The time is right. There has been a thawing of the ice on this.”

However, legislation would be only a first step toward repealing the limit, which would require approval by the electorate.

Like Deukmejian, Klehs pointed to voter approval last month of Propositions 98 and 99, the school funding and tobacco tax initiatives, which make major modifications in the limit.

As a result of the two measures, budget officials say, spending could be up $800 million annually. But, because of the narrow focus of the two initiatives and the requirement that other state programs continue to operate under the limit, the new spending must be either on schools or health and education programs tied to smoking.

Faced with mounting pressure to find money to build highways, expand the prison system and shore up financially hard-pressed hospital and welfare programs, lawmakers from both parties have been saying it does not make sense to allow so much new spending in just two limited areas.

Despite growing opposition to the spending ceiling, Klehs conceded that it may be impossible to completely eliminate the so-called Gann limit.

The limit can be repealed or amended only by another vote of the people. But to get it on the ballot, the proposed constitutional amendment must be approved by two-thirds majorities of both the Assembly and Senate. Klehs said it might be impossible to gain two-thirds approval for out-and-out repeal. He said he expects it to take at least a year for a compromise to be worked out to keep some kind of spending limit in place while allowing the state to meet its financial needs.

A coalition of public and private groups, from public employee unions to the California Chamber of Commerce, the California Taxpayers Assn. and others, is being formed to press for a change. “A very broad consensus is developing. A lot of people agree that changes need to be made in the limit,” said Leonard Goldberg of the California Tax Reform Assn.

Sen. John Garamendi (D-Walnut Grove), chairman of the Senate Revenue and Taxation Committee, also introduced legislation last week to alter the spending limit. Garamendi’s proposed constitutional amendment would exempt spending on capital projects, such as freeways, and projects financed by an increase in fuel taxes if those taxes are raised.