California: Running on Empty for Too Long : Bipartisan budget plan merits the governor’s attention

Leadership talks on the state budget have been stalled for nearly three weeks, but now two self-described “backbenchers” have seized the initiative.

Republican Sen. Frank Hill of Whittier and Democratic Assemblyman Phillip Isenberg of Sacramento got together late this week and came up with a bipartisan plan that at least might get things moving again. It provides for no new taxes, does not roll over debt into other fiscal years and isn’t loaded with one-time accounting gimmicks.

The plan proposed by Hill and Isenberg, who actually are influential members of their respective parties, also would resolve the major sticking point between the Republican governor and the Democratic-controlled Assembly--cuts in school funding. Gov. Pete Wilson has insisted that a cut of $2.3 billion will be necessary; Assembly Democrats have been willing to go for only $605 million.

The Hill-Isenberg plan would cut schools funding by $1.1 billion. That’s admittedly a huge reduction, especially at a time when enrollment is up by 200,000. But when there’s a $10.7-billion gap to bridge in the state budget, schools must take a severe hit along with other government services. One thing is sure: This year, almost nothing will escape the cutbacks.

The Hill-Isenberg plan would ease the schools’ cut by forgoing a planned $504-million reserve, taking $300 million from local redevelopment agencies and capturing $300 million or more by authorizing speedier processing of disputed tax settlements.

It also would incorporate many of the deep reductions in local government and health and welfare programs that have already been adopted by a joint Assembly-Senate conference committee on the budget.

Wilson’s initial reaction to the new proposal appears to be positive. Because it incorporates so much of what he has said he wants, it could well prove to be a test of whether he is serious about resolving the budgetary dilemma. There are some in his own party who wonder aloud whether he is taking a hard line mainly to try to undo the political damage he suffered last year--especially among fellow Republicans--when he agreed to raise taxes to balance the 1991-92 budget. Others suggest that Wilson believes that a continued fiscal crisis might help win passage of his welfare initiative on the November ballot--although he strongly denies this.

The Hill-Isenberg proposal will of course be subjected to close scrutiny, and doubtless many will find things to criticize. Los Angeles officials, for example, fear that taking money from redevelopment agencies or otherwise reducing the city’s funding could hinder efforts to rebuild after the riots.

Even if key parts of the Hill-Isenberg proposal never become part of a final budget, Wilson and legislative leaders can use the plan as a much-needed catalyst to restart serious negotiations, which were virtually abandoned after the July 1 deadline elapsed without a budget.

Meanwhile, the IOUs being used to pay the state’s bills until a budget is adopted have been piling up, and the state’s bond rating is suffering.

The protracted deadlock cannot go on. California has been running on empty for too long.