Governor’s Bills to Cut Spending on a Slow Track in Legislature

A legislative package of spending cuts that Gov. George Deukmejian needs to balance his proposed $47.8-billion budget, introduced with great fanfare in January, appears to be in critical condition, if not downright dead.

Most of the bills have been languishing in legislative committees for months, some unable even to get a hearing.

Republicans say Deukmejian, who plans to leave office after next year when he finishes his second term, has been standing on the sidelines and doing little to push his plan along.

In the case of a controversial proposal to cut $33 million from the in-home services program for elderly, blind and disabled patients, Deukmejian has been unable to even find a legislator willing to carry the bill. In other cases, lawmakers are carrying the governor’s bills, but without much enthusiasm.

Not a Candidate

Some legislators are grumbling that Deukmejian offered the kind of budget that only a politician who did not have to run for reelection would propose. And some view Republican opposition to certain budget proposals, which has been unusually strong this year, as a sign that Deukmejian’s lame-duck status may be eroding his clout in the Legislature.

Senate Republican Leader Ken Maddy of Fresno, who fears Republican defections on the budget, said: “The governor has perhaps less hold on (GOP lawmakers) than he might have had if he were in his first term and trying to ensure that his stewardship of the state was going to be intact after this year.

“I think if this were the second year of his first term, you wouldn’t see a budget like this. What you probably would have seen would be a more characteristic budget of governors who feel they have to get along.”

Maddy acknowledged that Deukmejian “is not pushing” his budget proposals. But he said the governor is as serious as ever about his proposed spending cuts and will not back down once budget negotiations begin in earnest next month.

The obstacles facing Deukmejian’s budget are illustrated by one of the governor’s more controversial proposals--a plan to spend $350 million on health programs for the indigent by using money raised through the Proposition 99 cigarette tax increase. Maddy is carrying the legislation.

Critics, including some Republicans, say that since Deukmejian is cutting roughly the same amount of money from other health programs, he is violating a provision of Proposition 99 that says the tobacco tax money cannot be used to supplant funds the state is already spending on programs.

Assemblyman Gerald N. Felando (R-San Pedro) urged Deukmejian to withdraw the proposal in a recent budget subcommittee hearing. “If the plan goes into the budget, it is going to leave us open to a lawsuit. I feel it is a misuse of those funds,” Felando said.

Another proposal by the governor that has an uncertain future is a proposed $33-million cut in the in-home supportive services program, which many experts say allows frail elderly people to stay out of nursing homes and continue living independently. Seymour said: “It is very shortsighted. It may save dollars today, but next year we’ll pay an extraordinary price for those same services.”

Sen. John Seymour (R-Anaheim) said that if Deukmejian persists in his proposal to cut the program for the elderly, he could face his first veto override in the Senate.

Also contributing to the problems facing his budget proposals is Deukmejian’s aloof political style. Since he took office in 1983, Deukmejian has frequently offered legislative proposals, only to let them drift for months in the Legislature. Some Republicans, after six years of Deukmejian’s stewardship, say they have never been invited into the governor’s office for discussions. To them, Deukmejian is a distant figure who only communicates with them through Republican leaders like Maddy.

Characteristically, Deukmejian handed down his budget proposals to the Legislature like a gauntlet.

Difficult Decisions

The cuts in the in-home supportive services program, the proposed elimination of the office of family planning and the plan to spend tobacco tax monies are only three of dozens of politically difficult decisions Deukmejian has asked the Legislature to make.

Another proposal gave lawmakers the choice of freezing food and rent payments to welfare recipients or cutting $200 million from mental health programs. Both programs have strong political support.

Deukmejian also proposed suspending a $163-million annual payment to the financially troubled State Teachers’ Retirement System, but then agreed to repay the money many times over in future years. Republicans as well as Democrats immediately criticized that proposal, and a competing bill has been introduced.

In the case of one controversial budget cut, a proposal to completely abolish the state office of family planning, a $36-million-a-year agency that dispenses birth control information and contraceptives, Deukmejian warned that if the Legislature does not pass a bill allowing him to eliminate the agency, he will veto $24 million from the program anyway.

Sen. Diane Watson (D-Los Angeles), chairwoman of the Senate Health Committee, said the governor’s bill to eliminate the office of family planning has little chance of getting out of her committee, where it is bottled up.

Watson and other Democrats plan to combat Deukmejian’s threatened budget cuts by eliminating from the budget a number of programs closely identified with the governor, such as overseas trade offices and the Department of Tourism, expansion of the state prison system, and support for the Rural Renaissance program, a financial aid program for rural counties.

Deukmejian can take a hard line stance because he holds the ultimate measure of power in the Capitol--the power of the line-item veto. This enables Deukmejian to freely ax programs and individual appropriations from the budget, knowing that he has enough Republican loyalists in the Legislature to block any veto override, which requires a two-thirds vote of each house.

Impact of Propositions

The budget problem stems in large part from the extraordinary complexity of balancing the state’s books after voter approval last year of Proposition 98, the school funding initiative, and, to a lesser extent, Proposition 99, the anti-smoking initiative. An appellate court decision has also prohibited use of single bills of the kind that the governor and Legislature customarily relied on to wrap up a lot of legislative loose ends.

In the past, Deukmejian and lawmakers could work out an agreement on a main budget bill, containing most of the the state’s major appropriations, and then follow that with a supplemental bill containing changes in law necessary for the budget proposals to take effect. By linking a number of issues together in one supplemental bill, political leaders could put together consensus legislation containing individual items that lawmakers would not have voted for separately. But as a result of the 1987 court decision, individual issues must be addressed in separate bills. Thus, Deukmejian needs more than a dozen bills to make his budget plan work.

Proposition 98, which earmarks 40% of state budget expenditures for public schools and community colleges, as well as other legal restraints on the expenditure of tax revenues have left the governor and Legislature in the unusual situation of considering deep budget cuts in some programs at a time when state revenues may be as much as $800 million higher than expected.

That situation has developed because Proposition 98 provides schools not only with 40% of general fund budget revenues, but it gives them 100% of any surplus up to the first $600 million. Unless the governor and Legislature can agree to suspend Proposition 98, schools are in line to receive nearly all of the excess income tax revenues that have been coming in this spring.

When he proposed his budget, Deukmejian complained that he had control over only 8% of discretionary state spending. He said he was “forced” into proposing the budget cuts. “I don’t wish to have to make any of these reductions. But if the Legislature does not support such actions, I fear that the alternative will be much worse,” Deukmejian said in January.

His position has not changed.

Michael R. Frost, Deukmejian’s chief of staff, said the governor would still like to avoid some of the budget cuts, but the Legislature has not presented him with any alternatives.

‘Ball in Their Court’

“The ball is in their court. It’s their call,” Frost said. “Proposition 98 has made it real difficult for us to find enough money for all the health and welfare programs. So we look to where we can cut. The office of family planning, for example, just happens to be one of the areas where we can still make a cut.”

Because of the legislative opposition and the discovery of the excess tax revenues, there is talk in the Capitol that Deukmejian and his budget advisers are at work revising the governor’s budget plan.

One of the lawmakers who anticipates some changes is Assemblyman William P. Baker (R-Danville), vice chairman of the Assembly Ways and Means Committee. Baker is carrying the bill that would implement Deukmejian’s proposed freeze on the 1.8 million Californians, mostly women and children, receiving food and rent payments under the Aid to Families with Dependent Children program. “No one wanted to carry the bill, so I did,” Baker said.

Baker said the new revenues may provide enough money for the state to make the welfare bill unnecessary.

But he contended that Deukmejian will be in the driver’s seat once the final round of budget negotiations begins. “In the end, Democrats are going to need the governor’s signature, so all of the so-called governor’s plan is going to be subject to negotiation,” Baker said.

Frost said the governor will not yield as much as some lawmakers would like. Deukmejian plans to review all of his budget proposals before releasing the final estimates of state revenues and expenditures, probably this week, the aide said. “But at this point, we don’t have any plans of dropping them,” he added.

However, Sen. John Garamendi (D-Walnut Grove), chairman of the Senate Revenue and Taxation Committee, warned, “There is going to be a horrible blood bath around here if the governor proceeds.”