Assembly Approves Budget; Wilson’s Signature Expected

After a day of maneuvering and brinkmanship, the state Assembly on Monday night approved California’s $63-billion budget, increasing school spending and cutting taxes for businesses and banks while refusing to reinstate a tax cut for renters.

The spending plan was approved by a 61-17 vote late Monday, seven more than the required two-thirds majority. The vote came a week after the state constitutional deadline for adopting a budget for the 1996-97 fiscal year, and a day after the state Senate approved the measure.

Gov. Pete Wilson is expected to sign the budget into law as early as Wednesday, after all 28 related bills that implement the budget arrive on his desk, and after he uses his blue pencil to veto specific projects he dislikes.

In approving the budget, Assembly Republicans emphasized tax cuts, giving corporations and banks $230 million in reductions starting Jan. 1. Democrats cited the $2.8-billion increase for public schools and no tuition increases at state universities and colleges.

Abortion opponents failed to mount a serious attack on the spending plan, although several of them voted against the budget because it includes continued funding for abortions for Medi-Cal recipients.

“We need to ensure we keep jobs in this state. This tax rate reduction will allow us to be competitive again,” said Republican Assembly Speaker Curt Pringle of Garden Grove.

In addition to the tax cut, Pringle said the budget reflects priorities of education and public safety. It includes $100 million in grants for local police, sheriffs and prosecutors, including $28.6 million for law enforcement in Los Angeles County.

Several Democrats chastised Wilson and the Legislature for failing to increase welfare spending while cutting corporate and banking taxes by 5%.

“That safety net really didn’t get much attention,” said Antonio Villaraigosa (D-Los Angeles), who voted for the budget. “The blind and disabled really didn’t get what they should, after five years of cuts.”

Meanwhile, the Senate and Assembly approved the 28 budget-related bills. They range from much-touted measures setting the formula for how schools would be reimbursed for cutting class sizes to 20 students per teacher in lower primary grades to a little-noticed part of the budget that would give a $5-million tax break to horse racetracks next year.

“This is an historic bill that will improve academic performance,” Assembly Education Committee Chairman Steve Baldwin (R-El Cajon) said of the bill to reduce class size.

The spending plan gives public schools a record $28 billion, including $771 million for reducing class size. The budget also contains a $287-million emergency reserve.

Democrats took a run at trying to kill the budget-related bill that included the banking tax cut, but failed.

“Banks are becoming the biggest thieves in this state,” Assemblyman John Burton (D-San Francisco) declared. “They charge you for using a teller. They charge you for not using a teller. . . . Yet we have to give them a tax break.”

Several floor fights during the day revolved around budget-related bills that dealt with state funding of prenatal care and abortions for poor women.

Assembly Democrats, for example, joined by a few moderate Republicans, blocked legislation that would have denied state-funded prenatal care for pregnant women who are illegal immigrants, a program that costs $32 million.

Assemblyman David Knowles (R-Placerville), the bill’s author and an abortion opponent, said the measure “is about whether or not you believe taxpayers should be forced to pay for services for people who commit illegal acts.”

Democrats, however, insisted that the children, who if born in this country are citizens, would be the ones most harmed by Knowles’ bill.

“Either you value life or you don’t,” said Assemblywoman Diane Martinez (D-Monterey Park), addressing anti-abortion Republicans. She noted that children of mothers who have had prenatal care generally are healthier.

As part of the budget agreement, Wilson and legislative leaders attempted to line up votes of anti-abortion Republicans for the budget.

They did this by shifting $10 million from the governor’s Office of Family Planning to the Medi-Cal program, and directed that the money be spent only for groups that offer contraceptives, not abortion services.

But Katherine Kneer, lobbyist for Planned Parenthood in Sacramento, said she expects her organization will continue to receive state funding, even though Planned Parenthood clinics offer abortions and abortion counseling.

“That’s how they talk themselves into voting for the budget,” Kneer said.

In addition to abortion issues, Democrats and Republicans jousted over taxes. As part of the budget deal, Wilson and legislative leaders killed a Democratic effort to reinstate a renters tax credit, which was suspended in 1991.

But the Assembly spent more than four hours in gridlock on the issue, as Democrats refused to approve the measure until several Republicans joined them. Pringle finally grew impatient shortly before midnight Sunday and called three recalcitrant Republicans into his office off the Assembly floor.

The three--Paula L. Boland of Granada Hills, James Rogan of Glendale and Bill Hoge of Pasadena--face election fights in November, and Democrats could use the votes against the renters tax credit in mailers directed at renters.

The three emerged from their conversation with Pringle and changed their votes, now opposing reinstatement of the renters tax credit. This caused several Democrats to join in and give the measure the necessary approval by a two-thirds majority. The cost of giving the tax cut to renters would have been $520 million.

“There was a lot at stake,” Boland said, explaining her decision to change her vote. “We’d lose a lot of money for schools.”

Times staff writer Carl Ingram contributed to this report.