Legislation for Implementing Prop. 98 OKd by Assembly Panel

After being held up for a day by a funding fight between big-city and suburban school districts, a bill to implement Proposition 98, last year’s landmark school-funding initiative, was passed Wednesday by the Assembly Ways and Means Committee.

The bill, which fell one vote short of passage Tuesday, was approved 12 to 4 with no debate. The measure now heads for a vote by the full Assembly, then to the Senate for further action if it clears that hurdle.

Once the bill undergoes all its agreed upon amendments, it would provide $1.5 billion to public schools and community colleges over two budget years as part of the 40% share of state revenues promised schools under Proposition 98.

The chief point of contention is a provision of the bill that would set aside roughly $300 million to equalize state financial aid going to school districts for a variety of education programs.

Assembly Republicans, claiming that Los Angeles and other big-city school districts now get the lion’s share of state financial aid grants, held up work on the main budget bill for eight days while they worked out the compromise funding plan. While the Los Angeles Unified School District would not get a full allocation of money under the Proposition 98 plan, suburban and rural districts would benefit substantially.

Absent Legislators Return

Los Angeles Democrats managed to block the bill Tuesday, but on Wednesday, key legislators who were absent during the first vote showed up and sent the bill to the Assembly floor.

Assemblyman Pat Nolan (R-Glendale), who helped put the compromise plan together only to miss Tuesday’s vote in order to attend a high school graduation ceremony in his district, said the outcome was never in doubt.

“We shouldn’t have any trouble when the bill reaches the floor,” he said.

Meanwhile, six lawmakers from the Assembly and Senate sitting on a conference committee continued to wade through more than 700 pages of budget papers in order to come up with a compromise $50-billion budget bill in time to greet the new fiscal year, which begins July 1.

As it stood Wednesday, the legislative budget writers faced the task of finding $600 million from somewhere in the budget to build up a $1.2-billion reserve demanded by Gov. George Deukmejian.

The budget difficulties could be much worse if Deukmejian and legislative leaders fail to agree on a plan that will allow them to spend a $2.5-billion revenue windfall expected toresult this year and next from unexpectedly healthy income tax receipts.

Legislative leaders can spend the windfall only if they can find a way around the limit on government spending that was approved by voters and then amended last year by Proposition 98. The spending cap places strict limits on how much money lawmakers can spend and provides that schools and taxpayers divide up any tax funds the state receives in excess of what it is legally able to spend.

June 30 Deadline

If officeholders fail to reach agreement by June 30, the last day of the current fiscal year, then almost all of the $1.1 billion of the windfall will be split between schools and rebates to taxpayers. Lawmakers would like to spend a substantial amount of the money on financially troubled hospital, health care and mental health programs.

Deukmejian told reporters Wednesday that he is prepared to make deep cuts in health and welfare programs, albeit reluctantly, if a broad, long-term budget agreement is not reached.

The governor criticized state Supt. of Public Instruction Bill Honig for being too intractable in the negotiations going on over Proposition 98.

“It appears as though he and the education community are just focused on education. . . . We have to be interested in education, but we also have to be interested in all the other state programs,” Deukmejian said.

Willing to Delay Vote

Deukmejian also said he is willing to delay a vote on constitutional amendments needed to implement any agreement reached on the spending limit or a gasoline tax increase. Deukmejian had been saying that he wanted the vote held during a special election in November, but on Wednesday, he told reporters that he would be willing to have the measures put to voters next June under certain conditions.

“If it appears placing it on the June ballot would give us a better opportunity at passage, I would have no problem with that,” Deukmejian said.