Democrats Urge Tax, Fee Boosts to Avert School, Health Cuts

Faced with rebellious lawmakers, Democratic legislative leaders sought Tuesday to replace deep cuts in school spending proposed by Gov. George Deukmejian with tax and fee increases.

Senate President Pro Tem David A. Roberti (D-Los Angeles) outlined for the Republican governor “a $1.6-billion revenue enhancement proposal” that he said would avert the $800-million reduction in school funding and head off another $800 million in cuts to health, welfare and other programs sought by Deukmejian.

Roberti was joined in his plea to Deukmejian by Assembly Speaker Willie Brown (D-San Francisco).

Both Democratic lawmakers told the governor that Democrats were uniformly opposed to Deukmejian’s proposal, which in the case of schools would require legislative approval in order to suspend voter-approved Proposition 98.

As an illustration of what an $800-million cut would do, Henry Jones, a division administrator for the Los Angeles Unified School District, estimated that his board would have to cut another $100 million from its basic education program on top of the $220 million in cuts it is already grappling with.

“It would simply be devastating,” Jones said.

Republican legislative leaders, sitting in on the private meeting with the governor, also said GOP legislators were opposed to the school cuts. But they fell short of supporting tax or fee increases at the level proposed by Democrats.

The developments came less than a day after Deukmejian proposed $3.6 billion in budget cuts to head off a potential deficit in the $56-billion state spending plan being prepared for the 1990-91 fiscal year, which begins Sunday.

With Democrats holding firm in their desire to raise taxes or fees--and Deukmejian equally adamant in his desire to solve the state’s financial troubles by rolling back spending--there appeared to be little chance that the lawmakers would be able to produce a new budget before the weekend. If the new fiscal year begins without a budget in place, the state will have no legal authority to pay its bills.

Still, starting the fiscal year without a budget seemed a better alternative to some lawmakers than accepting Deukmejian’s hard-nosed proposal.

Sen. Diane Watson (D-Los Angeles), chairwoman of the Senate Health and Human Services Committee, said the hundreds of millions in proposed health cuts “will kill what is left of the public health system in Los Angeles County, kill what is left of the mental health system.”

“None of us who represent Los Angeles--or any other county, for that matter--will be able to go home if we support those cuts,” she said.

On the Republican side, Assemblyman Pat Nolan of Glendale said: “I am very, very frustrated.” Several weeks ago, Nolan and eight other GOP members of the Assembly agreed to oppose any cuts in public school spending.

Noting that constitutional guarantees for schools require that any money cut this year be replaced next year, Nolan said, “It digs us into an even deeper hole next year. In the meantime, the schools will have to cut terribly into their programs at a time when they have hundreds of thousands of extra kids coming in.”

Senate Republican Leader Ken Maddy of Fresno, an early supporter of the governor’s proposal to cut Proposition 98 funding, said he was backing off because of so much opposition among Senate GOP lawmakers. “There is probably a majority of my people who would like to take 98 off the table also,” Maddy said.

One outgrowth of Tuesday’s meeting was that Democrats agreed to return today with a prospective list of $1.6 billion in budget cuts that they would support.

But they made it clear that they believe taxes or fees must be part of any final budget solution.

The biggest revenue gainer on the Democrats’ list is a proposal to temporarily halt the indexing of personal income tax tables. Under current law, tax brackets are adjusted each year so that taxpayers are not penalized with higher tax bills if they get inflation adjustments in their paychecks. Deukmejian proposed a similar measure in 1987, but quickly withdrew it when it was criticized as a tax increase.

Brown indicated that indexing was losing some favor among Democrats because the burden of the proposed tax increase would fall heaviest on Californians earning between $20,000 and $100,000. A study by the legislative analyst’s office found that a single taxpayer with a net taxable income of $22,000 in 1990 would pay increased taxes of 6%, or $46, if indexing is suspended. In contrast, the tax increase for a person with an income of $150,000 would amount to one-half of 1%, or $63, under the proposal.