Assembly Hits Final Round of Budget Battle

The Assembly on Wednesday began plowing through more than a dozen bills needed to implement the $52.1-billion 1993-94 budget on the governor’s desk.

With another late-night session in the offing, lawmakers weighed the fate of a half-cent state sales tax surcharge and tried to put the finishing touches on a plan to shift $2.6 billion from local governments to the schools.

Also pending were bills to suspend the renters tax credit and to give counties more flexibility to reduce welfare payments to the state’s poorest residents.

Democratic Assembly Speaker Willie Brown of San Francisco and Republican Leader Jim Brulte of Rancho Cucamonga both predicted that all the bills would be passed by the end of the session.

The state Senate was scheduled to meet today to complete action on the legislation, without which Gov. Pete Wilson has said he will not sign the budget.

Wilson’s chief spokesman, Dan Schnur, said that even if all the bills are passed today, Wilson probably would not sign the budget until closer to June 30, the last day of the fiscal year. Last year, the governor signed the budget and accompanying legislation within hours after the end of a 63-day stalemate only to learn later that some of the bills contained mistakes that had to be corrected with follow-up legislation.

“A lot of this work was done very quickly, very late at night by a lot of very tired people,” Schnur said. “Rather than allowing a drafting error to occur like last year, we’re going to go through this package very carefully.”

The Assembly was scheduled to begin its session at noon but pushed it back until later to give state lawyers more time to draft legislation based on agreements reached in negotiations late Tuesday and early Wednesday.

Brown said failure to complete the package Sunday night and early Monday, shortly after the governor and legislative leaders crafted a compromise deal, allowed lobbyists and individual lawmakers time to seek better treatment for their issues.

“I would have preferred to have completed all of this Sunday night,” Brown said. “I certainly wouldn’t be in the binds of all these people nickel-and-diming us on the proposed agreement.”

Among other things, the legislation pending in the Assembly would:

* Shift $2.6 billion in local government property tax to the schools to save the state an identical amount it otherwise would be obligated to give to public education from its treasury.

* Extend a temporary, half-cent sales tax for six months and give the money to counties and cities. Another bill to put a measure on the ballot in November asking voters to make the tax permanent is pending in the Senate. If the voters approve, the sales tax would raise about $1.4 billion annually.

* Give counties the authority to reduce welfare payments to single, able-bodied adults by up to 20% if the counties can show they need the money to provide other services.

* Suspend the renters tax credit for two years. An effort to link the suspension to placement on the ballot of a measure that would reinstate the credit and protect it from repeal was fading late Wednesday.

Brown, in a blunt assessment of the political calculus involved, said renters were about to lose their tax credit because they cannot be counted on to vote in legislative elections. In contrast, he said, the homeowner’s property tax exemption was safe because even placing a measure on the ballot to repeal it would be politically impossible.

“We don’t have the votes,” Brown said. “You’re taking something away from people who vote full time for your reelection.”

Renters move often, “which means you have to re-register,” he said. “And they don’t seem to carry any favor with suburban Republicans.”

The bill extending the sales tax was expected to be perhaps the toughest political sell for the governor and legislative leaders. The levy was enacted in 1991 as an emergency measure and was due to expire June 30. It would take a two-thirds vote in each house of the Legislature to continue the tax.

Assemblyman Ross Johnson (R-Fullerton), a former Assembly Republican Leader, said placing the tax issue on the ballot after taking $2.6 billion in local government funds amounted to political extortion. He said a promise to give law enforcement services first call on the money was simply window dressing.

“The governor and the Legislature are trying to blackmail the people of California to support extension of the sales tax,” Johnson said. “They’re going to give the voters an offer they can’t refuse.”

But Brown and Brulte said they expected to get sufficient votes to extend the tax. Still, some state senators were spreading the word at midday that the deal was “unraveling” in the Assembly.

Brulte denied it.

“Here in the Assembly,” Brulte said, “deals don’t unravel.”

Brown said he expected to complete action on the bills by the end of the day and send lawmakers home after a normal Thursday session. He said he would keep the Assembly in town if any last-minute glitches slowed progress on the package.

“Everybody will stay here until there’s a budget,” Brown told reporters.

State Budget Watch

Eight days before the end of the fiscal year, there were these key developments in Sacramento:

THE PROBLEM: The state will end the year with a $2.7-billion deficit and faces a $9-billion gap between anticipated tax revenues and the amount needed to pay off the deficit and provide all state services at the current levels for another 12 months.

THE LEGISLATURE

* The Assembly took up a series of bills needed to implement the state budget, which has passed both houses. Before the lower house were trailer bills to shift $2.6 billion in property taxes from local governments to schools, to keep a half-cent sales tax in effect for six months instead of letting it expire next week, to allow counties in a financial pinch to reduce welfare payments and to suspend the renters’ tax credit for two years.

* The Senate, awaiting action in the Assembly, did not meet on budget matters.

GOV. PETE WILSON: Wilson continued to review the budget bill on his desk.

KEY DEVELOPMENTS

* The bill extending the sales tax appeared to be the hardest sell in the Assembly. It needed a two-thirds majority in both houses to pass. With the governor’s signature, the bill will continue until the end of the year the extra half-cent tax on purchases that was due to expire June 30. Thereafter, the tax could be extended indefinitely if approved by state voters in November.

* The California Citizens Compensation Commission froze state legislators’ pay for a fourth consecutive year, citing bad timing for a raise in the current budget crisis climate. But most members said they favor an increase for state legislators to $72,500 a year beginning in 1994, up from $52,500 that most earn now. The pay commission was created by a 1990 voter initiative to determine salaries of state officeholders. Members must decide on raises by June 30 each year.