Democrats Block Wilson’s Budget Plan

Assembly Democrats blocked Gov. Pete Wilson’s proposed budget Wednesday but then positioned a competing plan to be considered today, when it could be amended to remove the objections of Republican lawmakers.

The state Senate, meanwhile, passed and sent to the Assembly landmark legislation that would give county governments more freedom to reduce health and welfare services, a key issue in the budget stalemate that has lasted more than 50 days.

Together, the two developments signaled an increased eagerness on the part of lawmakers in both parties to negotiate an end to the record-setting standoff, with or without Wilson’s participation.

The Assembly rejected Wilson’s budget on a 46-31 partisan vote after a lengthy debate in which more than one-fourth of the lower house’s 80 members spoke on the issue.

Republican Leader Bill Jones of Fresno said the governor’s $57-billion spending plan was intended to strike a balance between education, health and welfare programs, and local governments in a year when demand for public services is rising but spending is expected to decline.

“That’s not easy to do,” Jones said. But he added: “There’s no hidden money. There’s no tax increases. There’s no ability to find some solution at the eleventh hour that will make this problem go away.”

Wilson’s proposal would fund elementary, middle and high schools at the same level per student as last year--virtually the same amount included in a competing proposal drafted by Assembly Speaker Willie Brown (D-San Francisco), which is based on a plan offered earlier by Republican state Sen. Frank Hill of Whittier.

But under Wilson’s plan, the schools would keep pace with enrollment this year only by borrowing from the future. And Wilson’s budget reduces community college spending by about $200 million and would force those schools to raise fees to make up the difference, charging some students more than it would cost them to attend the University of California.

Democrats, citing their differences on education as well as health and welfare issues, denounced the governor’s budget as mean-spirited and a retreat from investment in the state’s future. Several conservative Republicans also criticized the plan, even though they voted for it in hopes of keeping a bill alive that they could amend later.

“I don’t want to take money from community colleges to fund PR flacks in state government,” said Republican Assemblyman Patrick Nolan of Glendale, referring to Wilson’s opposition to a proposal to eliminate nearly 200 public information officers from the payroll.

After rejecting the governor’s proposal, Democrats took up the competing plan and voted 46 to 25 to amend it into pending legislation. The bill is scheduled to be taken up today.

That budget bill will be subject to amendment, unlike the typical process in which the Legislature votes for or against but cannot make changes in a spending plan drafted by a two-house conference committee. Several Republicans said they were encouraged that the process would allow them the chance to push amendments that might make the budget acceptable to them.

“There is now a budget bill before us that’s amendable,” said Assemblyman Ross Johnson (R-La Habra). “It’s always been take it or leave it.” Johnson said the Democrats had “come a long way” toward Republican positions and said he thought a bipartisan deal was within reach.

Wilson’s office, though, released a harsh statement condemning Democrats for blocking his proposal and accusing them of taking “several steps backward.”

“Instead of making the tough choices to get our fiscal house in order, the Democrats have chosen to take the hibernation approach to solving the state’s budget crisis,” the statement said.

Wilson complained about the Democrats’ inclusion of a Medi-Cal accounting shift in their budget, which would allow the state to account for the health claims at the time they are paid rather than when they are in the pipeline. But several legislative sources said they expected Democrats to back away from that provision and possibly replace it, at Republican urging, with a repeal of the renter tax credit.

Other amendments that Republicans are expected to offer would fall short of meeting Wilson’s demands but might still produce a balanced budget that could get the two-thirds majority required for passage. The Republicans, for example, reportedly will seek to make a permanent 4.5% cut in welfare that the Democrats want to be temporary. Wilson wants an immediate 10% reduction in grants and another 15% reduction in six months for families with an able-bodied adult.

Separate from the budget bill, Republicans also want to remove restrictions the state places on the way county governments spend their money. The issue is important because both budget plans under consideration would shift hundreds of millions of dollars in property taxes from counties to schools and transfer the same amount of money from schools to the state.

Republicans say the counties will be forced to cut police and fire services if they are not given more freedom to reduce spending on health and welfare programs, much of which is dictated by the state. Wilson, after several meetings with legislative leaders, declared an impasse on that issue in early August.

But late Wednesday, the Senate adopted a bipartisan compromise on the issue. Two measures, each passed with two-thirds majorities, would allow counties to set their welfare grants for single, able-bodied men at a level below what the state pays to poor families with children. The legislation also would delete from state law a requirement that counties only reduce health services when they can ensure that the poor still receive a standard of care comparable to what is available to private paying patients in the community.

“This bill is a linchpin,” Sen. Hill said. “This issue has been what’s holding us up from getting agreement on the local government piece.”

MEDI-CAL BEDLAM: With IOUs cut off, poor people are being turned away. A3

State Budget Watch

On the state’s 50th day without a budget, these were the key developments in Sacramento:

THE PROBLEM: Legislators and Gov. Pete Wilson need to bridge a $10.7-billion gap between anticipated revenues and the amount it would take to continue all programs at their current levels, rebuild a reserve for emergencies and erase last year’s deficit. The state is short of cash and, without a budget for the fiscal year that began July 1, cannot borrow money to pay its bills. Instead, claims are being paid with IOUs known as registered warrants.

IOUs

Issued Wednesday: 8,360, with a value of $23.7 million

Since July 1: 1.2 million, with a total value of $2.76 billion.

Interest costs to date: $6.7 million.

GOV. PETE WILSON: Pronounced as unacceptable a budget proposed primarily by Democrats. He said it “contains a mixture of recycled accounting gimmicks and over a half-billion dollars in unacceptable deficit spending.” In remarks prepared for transmission via satellite to the Republican National Convention in Houston, he said: “Nothing would please me more than to sign the right budget for California . . . balanced without taxes. . . . Taking my cue from a stubborn Civil War general, I propose to fight it out on this line even if it takes all summer.”

THE LEGISLATURE: Assembly Democrats blocked Wilson’s proposed budget but positioned their competing plan to be considered today, when it could be amended to remove the objections of Republican lawmakers.

OTHER ACTIVITY: Bipartisan support was building in the Senate for landmark legislation that would give county governments more freedom to reduce health and welfare services to the sick and needy, a key issue in the stalled budget negotiations.