As Usual, State Misses Budget Deadline

The tradition continues: California’s new fiscal year starts today and the governor and Legislature have missed the state’s constitutional deadline for adopting a new budget.

As it is almost every year, school spending is the big sticking point. But there’s a twist this time--it’s Gov. Pete Wilson and Republicans who are pushing for school spending. Democrats, usually the ones demanding that more money go to schools, find themselves in the uncomfortable position of taking a cautious, almost conservative approach.

Here’s what’s going on:

Wilson and Democratic leaders overcame a major budget obstacle Friday, when Senate President Pro Tem Bill Lockyer (D-Hayward) and Assembly Democratic Leader Richard Katz of Sylmar acceded to Wilson’s proposal for a tax cut--a 5% reduction in the rate imposed on corporate and bank profits. Democrats killed Wilson’s more ambitious goal of cutting personal income taxes by 15%, saying that plan would rob schools of billions of dollars in future years.

Without the income tax cut, there’s $500 million more to spend in the $63billion budget. The question: How to spend it? Democrats have some ideas. They’ve been pushing to increase state salaries by 4%, at a cost of almost $200 million.

But jockeying to become the “education governor” and seize an issue from the Democrats, Wilson is demanding that the Legislature pour $678 million into schools to reduce class size--to no more than 20 students per teacher--in the first, second and third grades. Over the weekend, the Republican governor declared that he would refuse to sign a state budget unless it includes the $678 million specifically for class size reduction. And indeed, both sides went home Sunday night without an agreement.

“This is going to be the best budget for education in a long time,” the Republican governor said of the $28 billion earmarked for schools. “We thought last year’s was good. It was. This year’s is even better, substantially better.”

Wilson has been advocating the first- and second-grade reductions for months. But he only began pushing for cutting the size of third-grade classes last week. By Saturday, he was saying he is “determined” to push through the cuts for all three grades. It’s “essential,” he said.

Campaign politics evidently play a part. Wilson and other Republicans worry that the new education money will go to increase teacher salaries--and Republicans have little interest in helping the public school unions, which are major donors to Democrats, with their salary negotiations.

“I don’t know what the play is. I can only assume someone is trying to outdo the other,” said Sen. Mike Thompson (D-St. Helena), chairman of the Senate-Assembly budget conference committee.

Noting that Wilson only recently “threw out the idea” of cutting third-grade class size, Thompson said, “Everyone seems to agree we can’t [do it] this fast.”

Wilson’s plan would require more than 20,000 new elementary school teachers and 15,000 new classrooms in place by September. Last year, the state gave credentials to only 5,000 new teachers for kindergarten through eighth grade.

“We’re all for class size reduction, but the fact is, you can only do so much in a short time before you are just throwing money away,” Lockyer said.

The governor would leave it up to the schools to devise a plan. If they can cut class size to 20 students per teacher in the three grades, they would get $500 per pupil. If they can cut class size for the core subjects of reading and math to 20 to 1, they would get $250 per student.

“The only one saying we can’t do it are the Democrats and the California Teachers Assn.,” said Assembly Budget Committee Chairman Gary G. Miller (R-West Covina), insisting that the money go for class size reduction and “not teachers’ raises, not to give teachers more free days off of work.”

Class size is not the only issue that’s hanging up the budget. Democrats are working to modify another Wilson education proposal--to give $50,000 grants to each school in the state for one-time projects.

Urban lawmakers contend that the plan is unfair because the money would not go as far in crowded big city schools as in rural and suburban campuses. Under their proposal, schools would get a minimum $25,000, and more based on enrollment.

Additionally, Democrats oppose an Assembly Republican proposal to slash money for schools under court-ordered desegregation plans and redistribute the money statewide. The Los Angeles Unified School District would lose $117 million under the GOP plan.

As the jawing and maneuvering continue, the 1996-1997 fiscal year opens and the state constitutional deadline for approving a budget passes.

There are no penalties in the Constitution for failure by lawmakers and governors to approve the budget on time. Missing the deadline by a few days has almost no impact on the state’s operation. State workers still get paid. Bills to add teeth to the constitutional requirement, such as docking legislators’ pay, die in the Legislature.

It’s not as if the lawmakers aren’t working. The Senate-Assembly budget conference committee met Saturday, knocking off a little after 7:30 p.m., and was back in session Sunday. Wilson and Senate and Assembly leaders were meeting into the evening.

The battle certainly won’t reach the magnitude of 1992, when the budget was more than two months late and the state had to issue IOUs to its vendors. Nor will it drag on as it did last summer, when Wilson, running for the Republican presidential nomination, canceled campaign trips to negotiate the deal, and the budget wasn’t signed until Aug. 3.

This year, more Californians are working and paying taxes, so the state coffers are flush. The Legislature probably will have a budget to vote on this week.

The budget needs a two-thirds vote in the Legislature. Some anti-abortion Republicans are likely to balk at voting for the budget because it will contain money for abortions for poor women, and because they want to slash $42 million from Wilson’s Office of Family Planning.

Some Democrats may hold out on issues such as welfare. While the budget contains no further cuts in welfare, Wilson and Republicans are refusing to boost welfare spending, and are blocking reinstatement of an income tax credit for renters.

Prison spending is unresolved, too. Wilson wants funding for six new prisons. Lockyer wants to reduce the number of felons who must serve prison time, and says he might support two new prisons.

“Our case numbers [of welfare recipients and others who rely on state aid] are down and revenue is up,” Thompson said. “If they’re interested in closing [a deal], we can close.”