Unusual Coalition Has Plan to Overhaul State Spending Limit

A potentially powerful coalition of labor and business leaders Thursday unveiled a proposed constitutional amendment in what they hope will be the first successful effort to overhaul the state’s voter-approved spending limit.

The proposal, which also requires voter approval, would give the Legislature the authority to spend as much as $2 billion a year more than currently allowed and open the door for substantial increases in transportation expenditures.

That would be accomplished by adjusting the current spending limit for inflation, a move critics say is necessary to give the state adequate resources to deal with such pressing problems as rising school enrollments, a faltering transportation system, exploding inmate populations in state prisons and the financially troubled state health system. It would also free from the limit all expenditures on transportation.

There is widespread agreement that the current spending controls are outdated. Even Paul Gann, the anti-tax crusader who led the 1979 initiative campaign that placed the budget restraints in the California Constitution, admits that there are flaws in the limit. But so far no one has been able to put together the right combination of political interests to repeal it.

Two repeal measures appeared on the June, 1988, primary election ballot, one backed by Gann himself. But both failed.

Supporters of the latest proposal believe that they may have come up with the best combination of political interest groups yet--an unusual coalition that includes the California Chamber of Commerce and the California Taxpayers Assn. on the one hand, and the 120,000-member California State Employees Assn. and other labor groups on the other.

Members of these groups have often been at odds on various initiatives and legislative measures.

“I’ve been in meetings to put this together with folks who I’ve never been in meetings with before,” said Andrew R. Baron, a lobbyist for the American Federation of State, County and Municipal Employees.

Supporters of the measure said they hope they can find enough support in the Legislature to put the proposed constitutional amendment before the voters. If not, they said, they will mount an initiative campaign to qualify the measure for the June, 1990, ballot.

The proposal will be amended into legislation being carried by Sen. John Garamendi (D-Walnut Grove), chairman of the Senate Revenue and Taxation Committee.

Garamendi, in announcing the proposal, called the current spending limit “a noose around the neck of California,” complaining that the state is “increasingly being choked by the limitations that are placed upon us.”

The proposal already has some influential opponents, including Supt. of Public Instruction Bill Honig, the California Medical Assn. and Senate Republican leader Ken Maddy of Fresno.

“As it stands, we are strongly opposed,” said Honig, claiming that the proposed amendment would repeal many of the gains public schools achieved with passage last November of Proposition 98, the school-funding initiative.

Proposition 98 guarantees public schools and community colleges 40% of the state budget and also provides that schools receive the first $750 million of any surplus funds the state takes in but cannot spend because of the spending limit. The coalition’s proposal would allow schools to continue to stake a claim to 40% of the budget, but would in effect raise the spending limit so high that there would never be surpluses for schools.

The California Medical Assn. claims that the proposal would not adequately help health programs. The group says more than $1 billion is needed to lift health appropriations to the pre-1982 level, when inflation and budget vetoes began eating away at the programs.