Honig Willing to See Prop. 98 Gains Trimmed

State Supt. of Public Instruction Bill Honig gave ground in his efforts to protect Proposition 98, the voter-approved school funding initiative, telling lawmakers Wednesday that he will go along with efforts to revise provisions of the California Constitution that are hampering preparation of next year’s budget.

Honig’s concession came during a hearing of the Senate Revenue and Taxation Committee, which is considering a proposed constitutional amendment that would revamp the state spending limit approved by voters in 1979 as well as alter provisions of Proposition 98, a landmark school funding measure approved in last November’s election.

The school chief told lawmakers that he considers the proposed constitutional amendment “a fair compromise,” even though schools would have to give up some of the gains they made with Proposition 98.

In endorsing the measure, Honig was attempting to block efforts by a powerful coalition of business interests, labor unions and hospital and medical associations that hope to undo more of the gains schools made with passage of Proposition 98.

Even after Honig’s concession, spokesmen for various groups told lawmakers that they are still not satisfied and threatened to put together an initiative campaign that would put a measure before voters in the June, 1990, primary election.

Under consideration by the committee is a proposed constitutional amendment that would revise formulas in the original spending limit in a way that would allow significantly increased state spending.

There is widespread agreement in the Capitol, voiced by Gov. George Deukmejian and both Republican and Democratic lawmakers, that the 1979 spending limit, together with Proposition 98 and various other legal restrictions on state expenditures, has forced unnecessary budget cuts and hampered their ability to keep state programs operating smoothly.

The measure before the committee would allow about $550 million in additional spending beginning with the 1990-91 fiscal year. By the end of the 1990s, it would free up more than $4.8 billion a year in additional appropriations.

The committee adjourned without taking action on the proposed constitutional amendment, authored by Sen. John Garamendi (D-Walnut Grove). The lawmaker said a final version of the measure probably won’t be ready for a committee vote until May.

A rival proposal was offered to the committee by the coalition of groups that have lined up against Honig and public school interests. Members of the coalition include the California Taxpayers Assn., the state Chamber of Commerce, the California Medical Assn., the Correctional Peace Officers Assn. and numerous other groups.

Their complicated proposal, simply put, would make less money available to schools than the Garamendi measure.

Honig said that despite the differences, he believes a compromise can be worked out “where we all win.”

Hours before the hearing, Paul Gann, the author of the original measure that created the spending limit in 1979, said he remains opposed to any efforts to change the expenditure ceiling.

“Once they start hewing away at it, they will cut it up until it’s gone,” said Gann, who placed the blame for the current budget problem on Proposition 98.

Approved by voters last November, Proposition 98 provides that schools receive 40% of the state general fund budget, provides for annual cost-of-living increases for schools and ensures that school districts, rather than taxpayers, will be first to receive future tax rebates.

Opponents of the measure said during the hearing that Proposition 98 will make schools so financially healthy that funding for all other programs financed from the general fund--universities, local governments, health and welfare programs--will decline.

Steve Smith of the California State Employees Assn. said Proposition 98 will allow schools to take “an ever and ever greater share of the state budget.”

George F. Cate, a lobbyist for the California Medical Assn., said several years of budget cuts have led to a gap of about $1 billion between what health programs need to continue their current level of services and what the state will give them. With schools getting a higher budget priority with Proposition 98, Cate said, making up for past spending reductions will be all but impossible.

“We would like to see Proposition 98 completely repealed,” Cate said.