Governor Calls Session to Halt Welfare Hikes

Gov. Pete Wilson set the stage for a major legislative showdown Monday, calling a special session to head off an automatic increase in welfare payments scheduled to kick in later this year.

In 1991, the Legislature approved a five-year freeze on annual cost-of-living increases for welfare recipients, when the state government faced a massive deficit. But beginning this July, the annual increases are scheduled to resume unless new legislation is approved before April 1, officials said.

Wilson has described the annual cost-of-living increases as “autopilot spending” that have been responsible for making California’s welfare payment one of the highest in the country while severely jeopardizing the state’s finances.

“I don’t think there are many people who believe that allowing welfare grants to balloon up again by 13% next year is a good idea,” Wilson said. “But that is exactly what will happen if we fail to act.”

In addition to the cost-of-living hikes, several of the welfare grant reductions that the Legislature approved in recent years are also scheduled to be eliminated this year. Wilson has asked that the temporary changes--worth about $1.2 billion per year--be made permanent.

Democratic leaders immediately cast the issue as a declaration of class warfare, pitting welfare reductions against a sweeping income tax cut the governor has proposed. Democrats also point out that it comes just after the tax rate was recently lowered for upper-income residents.

“It does not make sense to take more money from seniors and more money from children and at the same time give a . . . tax break to the wealthiest Californians,” said Assembly Democratic Leader Richard Katz (D-Sylmar).

Officials predicted that Wilson’s plan would pass in the Republican-controlled Assembly. But in an hourlong meeting early Monday between the governor and top legislative leaders from both parties, Senate President Bill Lockyer (D-Hayward) told Wilson that Democrats will reject any immediate attempt to permanently suspend annual cost-of-living increases for welfare recipients.

Lockyer’s response to the governor Monday essentially amounted to an early round of positioning for what is expected to be a highly political debate this year when tax cuts and welfare reductions are pitted against the backdrop of an election year.

Lockyer indicated that Democrats might support Wilson’s welfare plan, but only if significant other changes are made to his budget proposal.

Changes to welfare payments require at least three months to be effective because they involve adjustments at both state and federal levels. As a result, officials said the Legislature must vote before April 1 to head off the automatic increase scheduled to take place July 1.

Since the legislation must be effective immediately, state law also requires that the vote be taken during a special session or passed by a two-thirds majority of the Legislature. Wilson’s decision to call a special session, which begins Thursday, reflects the partisan nature of the issue.

Meanwhile, the Assembly approved a bill Monday repealing the state requirement that employers pay overtime to nonunion employees working more than eight hours a day. Forty Republicans, joined by Reform Party member Dominic Cortese of San Jose, combined to pass the measure.

The legislation would allow employers to avoid payment of overtime on long workdays if the workweek totaled no more than 40 hours. The bill faces an uphill battle in the Democratic-controlled Senate.

Republican Fred Aguiar of Chino introduced the bill, saying it would give employers and employees flexibility--allowing, for example, employees to work 10 hours a day for four days, then have three days off. Assemblywoman Paula Boland (R-Granada Hills) called the bill good for women. “They can get an extra day off with their families,” she said.

Assemblyman Wally Knox (D-Los Angeles), who opposed the measure, said, “Overtime is not some little thing. It’s what people pay their rent with. It’s what they clothe their children with.”

Times staff writer Dan Morain contributed to this story.