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Senate, Assembly OK Budget; Wilson Awaits Final Package : Spending: Governor says he will not approve $58-billion plan until all supporting bills are passed. State will continue to issue IOUs for up to a week even after it is signed.

TIMES STAFF WRITERS

Too weary to fight any longer and increasingly worried about the repercussions--political and otherwise--from California’s historic budget stalemate, state lawmakers on Saturday passed a $58-billion spending plan and sent it to Gov. Pete Wilson.

The budget bill cleared the Assembly without a vote to spare--60 days into the fiscal year and 75 days after the Legislature’s constitutional deadline for passing a budget. It calls for general fund spending of $40.7 billion, down from $43 billion last year.

Still pending in the Assembly late Saturday were about a dozen bills that would balance the spending plan by raising about $500 million in fees and implementing budget cuts in health, education, welfare and local governments. Wilson said Saturday he would sign the budget only after the Legislature delivered those measures to his desk.

Although the Assembly was still divided over education spending, proposed cuts to Wilson’s staff and other issues related to the budget, it appeared all but certain that the remaining bills would reach the governor by the scheduled Monday night adjournment of this year’s legislative session.

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Controller Gray Davis said his staff would begin working immediately to prepare to pay the backlog of bills that have been piling up since July 1, when the state stopped paying businesses that deliver goods to government agencies and quit reimbursing nonprofit organizations that provide health and social services on the state’s behalf. Davis said it would take his office about 48 hours after the budget is signed to pay the first $1.1 billion in claims.

Davis said that even after a budget is signed he will continue to pay bills with IOUs for as long as a week until state Treasurer Kathleen Brown can arrange loans to cover the state’s cash crunch. (Such temporary loans are often necessary even without a budget crisis.)

The Assembly’s passage of the budget bill came on a bipartisan 54-23 vote about 17 hours after the Senate passed the same measure on a vote of 33 to 5. The predominant sentiment from Democrats and Republicans in both houses was that the time had come to end the battle and get on with the state’s business.

“It is long past the time the public tolerates a philosophical fight between the Democrats and the Republicans,” said Senate President Pro Tem David A. Roberti (D-Van Nuys), who drafted the compromise with Senate Republican Leader Ken Maddy of Fresno.

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Democratic Assemblyman Bruce Bronzan of Fresno, chairman of the Assembly Health Committee, said the public’s anger over the lack of a budget had overwhelmed concern about the issues that were at stake.

“We have a tyranny of circumstances,” Bronzan said. “What we are fighting for has become obliterated by the damage we are doing to everybody.”

The key to the compromise was its treatment of public education. The deal would give Wilson one major point upon which he has insisted: a long-term reduction in the growth in education spending. But in exchange, Wilson agreed to advance the schools $960 million from their future guaranteed appropriations, enabling them to spend the same amount per student this fiscal year as they did last year.

The budget also would cut into health and welfare programs for the poor and the disabled, shift money from local governments and reduce spending on higher education while boosting fees 24% at the University of California and 40% at the California State University campuses.

In the Assembly, liberal Democrats and conservative Republicans found common cause in complaining that the budget spared Wilson’s executive branch--the state bureaucracy--even as it cut into higher education and services to the poor. Although Wilson has agreed to a $200-million reduction in state operations, lawmakers from both parties are angry that he has opposed their moves to eliminate the positions of public information officers, reduce travel, and cut the number of the governor’s political appointees.

“In this budget we will feed the bureaucracy before we will feed the kids in this state,” said Assemblywoman Jackie Speier (D-Burlingame).

Others complained that the budget contained too many temporary fixes and would lead to more deficits later. The budget was designed to close a $10.7-billion gap between anticipated revenues and the cost of retiring last year’s deficit, rebuild an emergency reserve and continue all state programs at their current levels.

“We are all weary from this crisis,” said Assemblyman Tom McClintock (R-Thousand Oaks), who opposed the budget. “We are all bone-tired. But if you adopt this budget you will have condemned the next Legislature and the one after that to repeat all of the travail we have come through.”

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Moderates from both parties, however, suggested that no lawmaker could reasonably insist on an ideal spending plan.

“This is not a perfect budget,” said Assemblyman Phillip Isenberg (D-Sacramento). “But it is not an incarnation of evil. This just happens to be a budget constructed by a bunch of people who try to muddle through as best they can.”

It appeared that the Assembly would go late into the night and possibly longer before passing the “trailer bills” that Wilson said he would have to receive before he would sign the budget.

The education bill was the most contentious piece of the package. It would allow the state to reopen its books from the last fiscal year to make it appear as if the schools never got $1 billion they received in excess of what they were guaranteed by voter-approved Proposition 98. The change would produce long-term cuts for schools because under Proposition 98 each year’s education budget is built atop the base of what was spent the year before.

That issue triggered the budget standoff June 30, when the Senate passed but the Assembly rejected the first step in Wilson’s plan to take back what he calls the “overpayment” to the schools. There is some question about whether the state can legally go back and retrieve that money. In hopes of preventing a court challenge, the Senate budget writers inserted a provision in the education bill that would suspend Proposition 98 if the accounting maneuver was ruled illegal.

The same reduction could be achieved with an upfront suspension of Proposition 98. But few lawmakers are willing to cast that vote directly because Proposition 98 has become a symbol of the state’s commitment to public education.

Another of the pending trailer measures would shift $1.3 billion in property tax from cities, counties and special districts to help balance the budget. That legislation was portrayed as the first step in the reversal of the state’s bailout of local governments after the passage of Proposition 13.

The health and welfare measure would reduce welfare grants to poor families with children by an average of 5.8% and apply the same cut to aid to the aged, blind and disabled.

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“It’s going to be a tough year to be poor in California,” Bronzan said.

Times staff writers Carl Ingram and Dan Morain contributed to this story.


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