Governor Stands Fast on 1/4-Cent : Quake relief: An attempt to broaden the special session is squashed. The stage is set for quick legislative action.


Gov. George Deukmejian and legislative leaders Friday squashed attempts to broaden a special session of the Legislature beyond plans to raise the sales tax by a quarter-cent for 13 months and pass a dozen bills directly related to the Oct. 17 Bay Area earthquake.

The governor and legislators met privately at midday and then put an end to efforts by some lawmakers to raise the sales tax by at least half a cent and pass nearly 100 quake-related measures not considered crucial at this time. The action prompted one senator to angrily resign his chairmanship of an influential committee.

Deukmejian said he is prepared to raise more taxes later if needed. But he said such talk now is "premature."

"What we are doing now is what is needed at this time," the governor told reporters.

Administration officials confirmed Friday, however, that Deukmejian plans to take as much as $197 million from other state programs to help fund the earthquake relief effort. Some of the money now targeted for quake victims had been destined for other housing programs unrelated to the temblor. One Democratic lawmaker, Assemblywoman Jackie Speier of South San Francisco, denounced the Administration's move as a "shell game."

But the signal having been given by Deukmejian and legislative leaders, committees in each house quickly approved separate versions of the sales tax measure, setting the stage for the Senate and Assembly to complete the special session as soon as today. But the action did not come without rancor.

In the Senate, there were fireworks when Senate President Pro Tem David A. Roberti (D-Los Angeles) told members of the Revenue and Taxation Committee not to bother pushing a half-cent sales tax increase because Deukmejian would not accept it.

Sen. John Garamendi (D-Walnut Grove) dramatically resigned his coveted chairmanship of the Revenue and Taxation Committee when it became clear that the panel would not pass a tax increase greater than a quarter-cent on the dollar.

"The only thing that precludes us from doing what is right is our own lack of courage," Garamendi said as he relinquished the gavel.

The committee then voted 7 to 1, with Garamendi the only dissenter, to pass the quarter-cent increase.

The Assembly Ways and Means Committee, meanwhile, passed its own version of the tax measure on a strictly partisan 12-5 vote.

The vote came shortly after Assembly Speaker Willie Brown (D-San Francisco) entered the Ways and Means hearing room and told the committee chairman, Assemblyman John Vasconcellos (D-San Jose), that he wanted the tax bill approved.

"Send it out. I want it out," Brown asserted loudly enough to be heard beyond the railing that separates the committee members from the public gallery.

Assemblyman Pat Nolan (R-Glendale) led the GOP opposition. "I don't understand the rush," Nolan said. He called the earthquake relief legislation "a cynical manipulation to raise taxes."

Nolan argued that the state, with at least $674 million in reserve, had enough to finance short-term earthquake aid through January, when lawmakers return for their regular session.

But the Democratic author of the tax bill, Assemblyman Rusty Areias of Los Banos, pointed out that the proposal came from Deukmejian, the ranking Republican in the state and a longtime opponent of tax increase measures.

"George Deukmejian has never been known as a big spender," Areias said. "This proposal was crafted between the Administration and the leadership of the Legislature. We need to get about the process of rebuilding. This is a first step."

Orange County legislators offered mixed views on the need for the quarter-cent sales tax.

Assemblyman Gil Ferguson (R-Newport Beach) called the rush to pass the measure "political posturing."

"No one knows what the cost figure (for repairs) is, we don't yet know what funds are going to be forthcoming from the federal government," he said. "I believe this is not the kind of problem that requires urgent attention in 24 hours or 48 hours. There is plenty of time to address the problem."

Ferguson endorsed a proposal by Assemblyman Tom McClintock (R-Thousand Oaks) that the state freeze spending for the first 12 weeks of the next fiscal year, which begins in July. The move would produce a savings of nearly $800 million, the same amount that would be collected by the proposed sales tax, Ferguson said.

Sen. John Seymour (R-Anaheim) suggested that the Legislature hold off on the sales tax vote until January or February, when more accurate quake damage estimates are made.

"I'm afraid we are being placed in a position of voting for something with incomplete data and information," he said.

However, Senator William Campbell (R-Haciena Heights), said he supports the proposed tax increase "because I believe it is necessary to provide funds immediately. . . . We may come back in January and say we need more or less, but it is a reasonable amount to ask for at this point."

In testimony to the committee, state Finance Director Jesse R. Huff said the state needs to spend just over $1 billion to match federal grants and provide financial assistance to local governments. He said the governor's plan is to use roughly $800 million from the sales tax increase. Huff said another $245 million would come from the budget reserve.

But the sales tax revenue and emergency reserve will not be the only source of money for earthquake repairs and relief. As part of its program, the Deukmejian Administration plans to use as much as $177.5 million from two bond measures approved by voters last year to help the homeless and to quake-proof buildings.

One measure is Proposition 77, a $150-million seismic safety bond issue that provides $80 million to upgrade masonry buildings considered unsafe in earthquakes and another $70 million for rehabilitating low-income housing.

The second measure is Proposition 84, a $300-million bond issue aimed at providing housing for the homeless. Up to $27.5 million would come from this measure, including $25 million earmarked for upgrading residential hotels used by people with very low incomes and another $2.5 million destined for emergency shelters.

The amount of bond money actually spent on earthquake relief will depend on how much is sought by local governments and property owners, said Maureen Higgins, director of the state Department of Housing and Community Development. "We picked the programs that would be most relevant at this time for earthquake relief," she said.

Advocates of the homeless in Southern California are concerned that using the bond money for earthquake relief would deplete resources for people who lost their homes long before the quake hit.

But Administration officials said Deukmejian has expressed a willingness to replace the money by increasing the amount of a $150-million bond measure planned for next year's ballot.

In addition to the bond money, Deukmejian's Finance Department has put on hold another $20 million needed to fund legislation previously passed by lawmakers and signed by the governor. Assemblywoman Speier released an internal Administration memo showing the intention to withhold the money from programs for AIDS victims, pregnant mothers and pesticide detection.

"I think this is becoming pretty transparent," Speier said in an interview. "There is an effort under way to use existing general fund money and money appropriated for other state purposes to respond to the earthquake issues. It is a ripple effect from the earthquake."

Deukmejian spokesman Kevin Brett acknowledged that these funds might go to the earthquake relief effort.

"The reserve and the funds that will be received from the sales tax increase are the primary methods of funding the earthquake relief," he said. "But that does not mean we aren't going to explore other methods as well. The bottom line is that we want to do whatever we possibly can to help the victims as quickly as we possibly can."

The tax increase, as now proposed, would cost Californians an extra 25 cents on every $100 of purchases--or a nickel for every $20 spent. The statewide sales tax now stands at 6%. The increase would be in effect from Dec. 1, 1989, until Dec. 31, 1990.

The decision by the governor and legislative leaders to stick to their script--a modest quarter-cent sales tax hike and a tightly written relief package--left dozens of measures proposed by rank-and-file lawmakers on the cutting-room floor. It was not clear Friday whether those bills would be taken up even in January.

One proposed bill, by Assemblywoman Maxine Waters (D-Los Angeles), would hold up work on double-decking the Harbor Freeway in Los Angeles until the Legislature receives assurances from Caltrans that the structure could withstand an 8.3-magnitude earthquake. Waters said she wants to avoid a calamity comparable to the collapse of the Nimitz Freeway in Oakland.

Waters also made an effort to use the gathering of lawmakers to win back $24 million cut by Deukmejian from family planning programs. Roberti and Brown agreed to Waters' request to convene a regular session of the Legislature concurrent with the special session. But it was unclear when that session would begin. It appeared, in any case, that Waters lacked the votes late Friday to restore the family planning money.

In addition to the battles over the sales tax measure, political skirmishes erupted on other parts of the leadership package Friday.

One major battle involved the question of whether private, nonprofit institutions, including Stanford University, should be eligible for grants of taxpayer dollars to repair earthquake damage. A proposal moving through the Senate would give the private groups the same eligibility for funding that local public agencies have under current law.

The proposal drew fire in the Senate Toxics and Public Safety Management Committee from Sen. Bill Lockyer (D-Hayward), who said there is so little money available that Stanford "shouldn't even be standing in line."

Added Sen. Art Torres: "The quake has created a lifeboat situation. Right now, we have to serve as the captain in deciding who stays on and who gets off." Stanford and other private institutions, he said, would have to be left behind.

In the end, the committee voted to give private agencies a chance to obtain state aid only after public agencies have received all they needed. The committee also put private universities behind private hospitals on the priority list and established a $1-million cap on public aid to private organizations.


The California sales tax now stands at 6% on each dollar of sales, but voters in 13 of the state's 58 counties have voted additional levies for local projects.

Eight counties have added an additional half cent, bringing them to 6 1/2%. They are Fresno, Inyo, Los Angeles, Riverside, Sacramento, San Benito, San Francisco and Santa Cruz.

Five other counties have added a full cent, bringing their sales tax to 7%. They are Alameda, Contra Costa, San Diego, San Mateo and Santa Clara.

Voters in six counties will decide Tuesday whether to add half-cent sales tax increases for transportation projects: Monterey, Nevada, Orange, San Bernardino, San Francisco and Santa Barbara.

Source: State Board of Equalization

Times staff writers Carl Ingram, Paul Jacobs, Richard C. Paddock and Carla Rivera contributed to this report.

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