Assembly OKs Budget; Some Issues Still Unresolved

With Gov. George Deukmejian and legislative leaders still negotiating a long-term agreement on transportation and other spending issues, the Assembly on Wednesday passed a $49.4-billion budget to get the state through the next fiscal year.

The budget was sent to the Senate on a surprising 66-3 vote.

The Assembly-approved budget would increase spending by 9.8%. It is guaranteed to invite numerous line-item vetoes from Deukmejian because appropriations run about $1 billion more than the governor has said the state can afford to spend.

Overshadowing passage of the budget are the talks between Deukmejian and leaders of the Assembly and Senate. The officeholders met privately again in the governor’s office and afterward said they were closer to agreement, but still had several differences to work out.

Assembly Speaker Willie Brown (D-San Francisco), one of the participants, said, “We are all optimistic, including the governor.”

Among other things, the negotiators are trying to work out a deal that will allow them to give health, welfare and other state programs a larger portion of the $2.5 billion in new tax revenues expected this year and next.

Deukmejian and legislative leaders want to ease the limit on government spending approved by voters in 1979 and repeal provisions of Proposition 98, the school funding initiative approved last year, that require the bulk of state surpluses to go to public schools and community colleges.

If they fail to reach agreement and pass a bill by Friday midnight--the end of the current fiscal year--lawmakers are required by the state Constitution to distribute roughly $1.1 billion of the windfall to schools and taxpayers.

The Assembly’s passage of the budget came after Democratic and Republican negotiators reached agreement on a two-year, $1.35-billion public school spending plan financed by a portion of the windfall tax revenues.

With the agreement, Republicans salvaged the favorable deal they had worked out earlier this month that calls for a substantial amount of the new tax revenues to be distributed to rural and suburban school districts. Under the agreement, schools statewide would receive an additional $406.5 million this year and another $953 million next year, over and above normal state funding.

The agreement would give schools a flat 4.6% increase--the governor had recommended 3.2%--that will be dispersed to school districts on a per-pupil basis.

In addition, it would provide $250 million to increase state funding for suburban and rural school districts. Republicans had originally sought $300 million, but agreed to the smaller amount to appease urban Democrats from Los Angeles and other big cities. The Democrats complained that money for the rural and suburban districts would come from allotments that normally would go to urban districts.

‘Good Agreement’

Sen. Gary K. Hart (D-Santa Barbara), one of the negotiators who worked out the agreement late Tuesday, said, “This is a good bipartisan agreement. It addresses the needs of suburban districts that a lot of Republicans were concerned about, but it does it in a way that does not screw urban school districts.”

The compromise will be amended into legislation carried by Hart and Assemblyman Jack O’Connell (D-Carpinteria).

During the Assembly debate on the budget, Assemblyman Patrick Nolan (R-Glendale) said, “This budget and the compromise that will be voted on later finally address the issue of equal dollars being spent on kids. This is a major step forward for this Legislature.”

With the education funding issue out of the way, the 1989-90 spending plan was passed with none of the fractious debate that usually accompanies passage of the budget.

Most of the extra spending that would be authorized by the Assembly-approved budget would be in health and welfare programs.

The budget would add $68 million in spending on AIDS treatment, testing and counseling programs. It also would restore $36.2 million to save the state Office of Family Planning, which Deukmejian would like to eliminate.

The budget contains a reserve fund of $870 million, substantially less than the $1.2 billion the governor has requested.

Kevin Brett, the governor’s press spokesman, said vetoes are likely. “The governor is absolutely convinced that in the wake of the substantial revenue fluctuations of the last three years that we need a substantial budget reserve.”

Last year, tax revenues were off by about $1 billion, necessitating a series of extraordinary budget reductions.

BILL STALLED--Abortion fight stalls bill in Assembly. Page 25