Midnight Approaches

California is no Cinderella these days, but its budget will turn into a pumpkin Friday at midnight unless the Legislature and Gov. George Deukmejian complete complex negotiations over the future of school spending in the state, an $18.5 billion transportation program and the ability of the state to finance other basic needs in the years to come. This is a three-dimensional puzzle that is complicated by the clashing of political personalities. But the cost of failure is too great to consider.

The state Assembly filled in an important blank Wednesday when it passed, by a lopsided vote of 66 to 3, the $49.4-billion budget for fiscal 1989-90. The Senate will vote on the budget today. Still, the budget was the easy part of the job this year, aided by an unanticipated bounty of tax revenues to the state. Everything else must be fitted together by the start of the new fiscal year at 12:01 a.m. Saturday.

The bigger issue is the revision of two initiatives written into the California Constitution that put an almost impossible burden on the governor and the Legislature as they try to make state revenues stretch to cover urgent needs. One is the Gann initiative of 1979 that sets an unrealistically low limit on state spending, even when the revenue is available. The second is Proposition 98 of last year, the initiative that guarantees state public schools from kindergarten through community colleges 40% of the California general-fund budget. It also overrides the Gann limit to give the schools first call on any surplus revenues.

The goal of the crisis negotiations is to relax the Gann formula and then to amend Proposition 98 so that any excess revenues can be allocated more equitably to all state programs. Without such legislation, education would get $1.9 billion of the expected $2.5 billion windfall. Other critical programs would have to be cut accordingly.

If that is not complicated enough, the transportation finance program, which has the solid support of state business and governmental leaders, stands or falls on the outcome of the Gann-schools tangle. Without a relaxation of the Gann limit, the new gasoline tax money could not be spent.

The major problem has been to satisfy Bill Honig, the state superintendent of public instruction and chief sponsor of Proposition 98 in the last election. Honig, an effective and occasionally combative crusader, claimed that negotiators were trying to dismantle Proposition 98 in defiance of the voters, even though he already had agreed to a compromise that would significantly relax education’s grip on future budget surpluses. Honig had a valid point, but he was unnecessarily shrill on Tuesday in threatening to kill the gas tax and everything else he did not like--or, as he tends to put it, anything that “hurts kids.”

Proposition 98 was bad public policy, but voters endorsed the concept of 40% of the budget for schools. Honig has a legitimate claim for that, along with increases to accommodate growth in school populations and inflation. Others have a legitimate concern that the 40% will mushroom to 46% or 47% of the budget. A way to satisfy both sides must be worked out.

A solution by Friday midnight still would leave California trying to get around in the 20th Century by carriage. But that beats traveling by pumpkin.