Senate Tries New Approach to State Budget

A key Senate committee took steps Thursday that could produce an early confrontation with Gov. Pete Wilson over the next state budget.

Their strategy: accept Wilson’s assumptions about the economy and the level of tax revenues the state can expect, then prioritize the state’s programs and propose a list of cuts that portrays the likely consequences of Wilson’s policies.

The committee’s Republican members and a representative of the governor said they welcomed the approach as an honest effort to draft a budget that lives within the state’s stagnant revenues.

But the committee’s Democratic members hope that the exercise will produce a jolt of reality that will turn up the political heat on Republican Wilson, forcing him to abandon his insistence that a temporary, half-cent sales tax be allowed to expire on schedule June 30.

“I predict this will be a real donnybrook,” said state Sen. Alfred E. Alquist, a San Jose Democrat and longtime chairman of the Senate Budget Committee. “I think that the governor will probably have to back down on (not extending) the sales tax.”

The committee’s action was a sharp departure from past practice, when legislative budget writers often chose to ignore the governor’s assumptions as they wrote their own spending plans. Those plans were based not on how much revenue the state expected to receive, but on how much money it would take to continue all programs for another year without any reduction in services.

Last year, the Democrats’ preferred level of spending would have required tax increases or deficit spending that the governor would not support. But Wilson refused to spell out what programs he would cut if he got his way on taxes. A stalemate developed, and the state went 63 days into the fiscal year without a budget.

The Senate’s new approach should force a confrontation much earlier.

The committee will decide by April 12 how much money each of four subcommittees that have domain over parts of the budget will have to cut from the programs under their control. About a month after that, the full committee will review the proposed cuts and move a budget to the Senate floor. The Assembly intends to take a similar approach and produce a budget of its own by about the same time.

The Senate subcommittees were told Thursday to assume that the state will have about $36.8 billion to spend on general fund programs in the fiscal year that begins July 1, compared to the $41.4 billion that will be spent in the year that ends June 30.

The only programs likely to be spared from cuts are primary and secondary education. Like the governor, the committee will assume that those schools will get about $4,200 per student, the same as they are receiving this year.

Every other program--from universities to welfare, from prisons to health services--will be asked to make up part of the budget shortfall.

The subcommittees will be giving priority to state programs that are “essential to life, safety and have a demonstrated positive effect on the state’s economy,” Alquist said.

A top Wilson budget aide said the Administration welcomed the Senate’s approach.

“This is very significant,” said Steven Olsen, deputy director of the Department of Finance. “For the first time, a fiscal committee is instructing its subcommittees to spend no more than the resources available. That’s never happened before.”