$49.3-Billion Budget Signed by Deukmejian

After wiping out $646 million in spending proposed by the Democrat-controlled Legislature, Gov. George Deukmejian on Friday signed a $49.3-billion budget for the new 1989-90 fiscal year.

The final version of the budget exceeds last year’s spending plan by $4 billion--an 8.7% increase. The budget will be financed by growth in existing sales, income and other taxes and will require no new tax levies.

Deukmejian, in signing what is his seventh and next-to-last budget, called it “a generous but responsible spending plan for a growing state.”

The Republican governor, who does not plan to run for reelection next year, said the new budget “reflects compassion for both people who are receiving the services, as well as compassion for the taxpayers who provide the funds.”

As is usually the case, education, from kindergarten through University of California graduate school programs, will get most of the money in the new budget--$27.5 billion, or 52.6% of general tax revenue. Health and welfare programs, which will get an 8% increase, will take a 31.1% share of the budget.

As for the vetoes, Deukmejian followed through on earlier threats and slashed $24 million from the $36-million annual budget of the state Office of Family Planning.

In other actions, Deukmejian vetoed a $100-million appropriation for medical services to the working poor, replacing it with money from a federal immigrant relief program due to expire in 1991. He cut another $116 million from local mental health programs--money that Los Angeles and other counties say they need to avert cutbacks in local services. The governor also vetoed wording in the budget directing $100 million in new Proposition 99 tobacco-tax revenue to shore up the shaky finances of the state’s struggling network of trauma-care centers and emergency hospitals.

Deukmejian said the vetoes would have been much deeper had not he and legislative leaders reached agreement last week on a landmark budget-reform and transportation-improvement package. The agreement calls for a vote on a proposed constitutional amendment that would lift the spending limit that has restricted state expenditures in recent years and repeal provisions of Proposition 98, the school funding initiative approved by voters last year.

Deukmejian said many of the vetoes stemmed from his desire to bring the state’s emergency budget reserve up to $1.1 billion. The reserve got as low as $3.2 million during the last budget year.

The governor said the $1.1-billion reserve is “absolutely necessary” to protect the state’s AAA bond rating and to provide a budgetary cushion against sudden downswings in the economy or drains on the treasury caused by fires, floods and earthquakes or other emergencies.

One Democratic budget analyst said that when reserve funds for school programs and other unallocated funds are added up the true reserve actually totals more than $1.4 billion.

Senate President Pro Tem David A. Roberti (D-Los Angeles) criticized Deukmejian for setting such a large reserve by cutting what he said were critically needed funds from mental health programs.

Roberti, recalling that a once-huge reserve triggered the taxpayer revolt that led to passage of the landmark tax-reduction initiative Proposition 13 in 1978, said, “There comes a point where the public thinks they’re being taxed for no reason except to collect money.”

Assemblyman John Vasconcellos (D-Santa Clara), chairman of the Assembly Ways and Means Committee, said, “The governor’s intransigent position on a $1-billion-plus emergency reserve is a triumph of formality over reality. The emergency is out there right now.”

Commenting on the mental health cuts, Roberti said, “Frankly, there was no reason for those cutbacks. . . . We can’t thrust California back into the dark ages when it comes to mental health care.”

Roberti said the cut in funding for trauma-care centers “may be a fatal blow” for the struggling trauma-care network.

Both Roberti and Assembly Speaker Willie Brown (D-San Francisco) said they hope they can persuade Deukmejian to restore at least some of the cuts later this summer.

Brown said he thought Deukmejian could have found money to balance the budget without “squeezing the underfinanced services to the severely mentally ill (and) decimating vital family planning aid.”

In other reaction, Bryan Jones, a spokesman for the California Coalition for Mental Health, called the mental health budget cut “a disaster” for community programs.

“It just doesn’t show any concern or understanding of the crisis in the mental health system,” Jones said. He predicted that the cut would trigger a new round of budget cuts in mental health programs by Los Angeles and other California counties.

Criticizing the cut in family planning funds, Linda Joplin, state coordinator of the National Organization for Women, said: “This is just going to hurt the people who need the services the most. I think the governor is bowing to pressure from those members of the Legislature who want to decimate this program.”

Vetoes May Be Overridden

Deukmejian signed the budget documents and his veto messages during a brief ceremony in his office to which the press was invited.

The governor refused to answer questions about his budget cuts. “I think the public is interested in knowing how their money is going to be spent and not so much interested in how their money is not going to be spent,” he said.

The Legislature could override any of the governor’s vetoes. But an override would require approval of two-thirds of the membership of each house of the Legislature. Roberti indicated that any override would be a long shot but that if an effort is made it would be to restore some of the mental health cuts “because the governor totally decimated the . . . program.”

Roberti noted that in his veto message Deukmejian asked the Legislature to restore $157 million to programs the governor has a special interest in, such as prisons, tourism and aid to rural counties.

“I tend to think it may still open to some level of negotiation. . . . I see no reason at this point to raise the flag and declare war,” Roberti said.

As he has done in previous budgets, Deukmejian zeroed in on the California Coastal Commission, trimming its allocation by $651,000. The veto represents about 10% of the agency’s budget.

Expressing hope that the money will be restored later this summer, Commission Vice Chairman Robert Franco said, “These cuts would significantly damage our ability to handle the increasing pressures on our coast, including proposed offshore oil development.” A recent report said that since 1977 the Coastal Commission has undergone a 56.6% reduction in state funding when measured against inflation.

AIDS Funding

Deukmejian cut $58.2 million of the $62 million in extra funding for AIDS research, treatment and prevention programs added to the budget by the Legislature.

Even so, the governor told reporters: “The fight against AIDS will total $128.5 million, from all sources. That is a 32.3% increase over last year.”

In his remarks, Deukmejian stressed expenditure increases in the new budget, most of which were made possible by a $2.5-billion windfall in new tax money that turned up last spring because of unexpectedly high income tax collections. These include $36.9 million restored to the budget to finance county juvenile justice programs and $10.5 million to hire 150 new officers for the California Highway Patrol. The budget also proposes fee increases of 3% for students at the University of California and California State University system, down from the 10% increases sought in the governor’s initial spending proposal last January.

RELATED STORY: Metro, Page 1

GOVERNOR’S BUDGET CHANGES Dollars expressed in millions AGENCY State and consumer services: $1.5 million for State Personnel Board staffing, $800,000 for a proposed child day-care center in Van Nuys LEGISLATIVE PLAN $551.0 AFTER CUTS BY GOVERNOR $546.7 AGENCY Business, transportation and housing: $3 million for operating homeless shelters, $2 million for a self-help housing program, nearly $2 million for sound walls on I-405 in Los Angeles County LEGISLATIVE PLAN 2,873.5 AFTER CUTS BY GOVERNOR 2,858.1 AGENCY Resources $5.3 million for various Dept. of Parks and Recreation projects, $651,000 for the Coastal Commission LEGISLATIVE PLAN 1,903.1 AFTER CUTS BY GOVERNOR 1,885.2 AGENCY Health and welfare $116 million for mental health programs, $52.8 million for AIDS programs, $24 million for family planning offices, $600,000 for Alzheimer’s disease day-care centers, $12 million for intravenous drug user treatment, $480,000 for a proposed Office of Minority Health Affairs LEGISLATIVE PLAN 13,115.7 AFTER CUTS BY GOVERNOR 12,648.7 AGENCY Youth and Adult Correctional Agency LEGISLATIVE PLAN 3,312.1 AFTER CUTS BY GOVERNOR 3,340.5 AGENCY Education (K-12) $3.9 million for school dropout prevention, $1.1 million for the California Literacy Campaign for adults, $410,000 for driver education LEGISLATIVE PLAN 15,614.1 AFTER CUTS BY GOVERNOR 15,610.5 AGENCY Higher education $1 million for Alzheimer’s disease and geriatrics program, $428,000 for animal research alternatives LEGISLATIVE PLAN 6,283.8 AFTER CUTS BY GOVERNOR 6,278.8 AGENCY Other LEGISLATIVE PLAN 6,130.2 AFTER CUTS BY GOVERNOR 6,126.4 AGENCY TOTAL LEGISLATIVE PLAN 49,783.5 AFTER CUTS BY GOVERNOR 49,294.9