Even in a Year of Plenty, Budget Bogs Down

Fifteen days after missing the state constitutional deadline for having a budget in place, Gov. Pete Wilson and legislative leaders are plodding with no end in sight as they struggle to write a new spending plan.

Under the state Constitution, Wilson is required to sign a budget document by July 1, the start of the fiscal year. The Legislature was supposed approve a budget a month ago, June 15, but has yet to do so.

Wilson has signed a spending plan on time only once in his seven-year tenure, in 1993. That came after a record 1992 budget debacle when the budget was not signed until Sept. 2, forcing the state to resort to IOUs to pay its bills.

During the recently ended economic downturn, the excuse for not completing the budget on time was that Wilson and lawmakers had to grapple with tough issues such as tax hikes, spending cuts and public school funding in an era of falling revenues.

This year, though, the excuse is not a lack of money. The state is flush with more than $68 billion, $4 billion more than last year. In fact, Assembly Speaker Cruz Bustamante (D-Fresno) said one problem may be that it has too much money.

“There are raised expectations all over the place,” Bustamante said. “We don’t have the kind of money to resolve all of the expectations. So we are lowering expectations every day and bringing that message back to members, as well as to different competing entities.”

This year’s issues are many: welfare overhaul, more money for local government, how to pay for a new $2-billion Bay Bridge, splitting $32 billion for public schools, prison construction, raises for state workers, a $1.4-billion pension bill and a possible tax cut.

No lawmaker is predicting a quick solution.

“I hope we’ll have an opportunity within the next couple of weeks to resolve it,” Bustamante said Monday. “Some time next week, at the earliest.”

Veteran and freshmen lawmakers alike know there’s no penalty for missing the deadline. The so-called Big Five--the governor and the Republican and Democratic leaders from the Senate and the Assembly, who negotiate the budget deal--continue to get paid, as do all legislators.

As a result of court decisions initiated by previous budget stalemates, most other state employees also get their checks, and most--but not all--state bills get paid.

Still, in what has evolved into an annual embarrassment, California once again is dodging private firms that have contracts to care for disabled indigents in nursing homes and vendors who deliver goods such as food to state prisons and other institutions.

Midsummer budget impasses are all too familiar to Doug Cook, owner of Mountain Shadows Inc., a San Diego County chain of 18 nursing homes that houses 117 developmentally disabled people, including his son.

Like patients in similar homes across the state, the people who live at Mountain Shadows are extremely disabled, and in need of help eating, getting dressed and staying clean.

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Cook’s weekly state check for $190,000 didn’t arrive Monday. Until there’s a budget, he will be caring for his patients without reimbursement. After persuading his suppliers and landlords to delay their demands for payment, Cook can meet his payroll next week.

“After that, it becomes more than dicey,” Cook said, adding that most of his 265 employees make about $6.50 an hour and do not have fat bank accounts. “They can’t survive without income.

“If the Legislature would simply do what they’re supposed to do and pass the budget by June 15, we wouldn’t be in this situation,” Cook said. “It’s the way they wield their power, I guess. The legislators get their money. There’s no penalty for them.”

Controller Kathleen Connell estimates that she has been unable to make $1 billion in payments as a result of this year’s budget debacle. More bills come due daily.

“I’m very frustrated. It’s tremendously unfair,” Connell said. “My concern is that every day we delay, we’re not only placing an unfair burden on vendors, we’re losing credibility with the public.”

Today, Connell is expected to announce that 2,000 legislative aides not covered by union contracts won’t be getting their checks. That could add pressure on lawmakers to act, as could the Legislature’s looming one-month summer recess, scheduled to begin Friday.

On Sunday evening, Senate President Pro Tem Bill Lockyer (D-Hayward) emerged from a day of negotiations with Wilson and the other legislative leaders--after long hours in talks Friday and Saturday--and summed up the problem like this:

“It’s basically how do you fit $3 billion worth of wishes into $1 billion?”

The comment appeared to be a not-so-subtle jab at Assembly Democrats.

In an interview Monday, Senate Republican Leader Rob Hurtt of Garden Grove said he was astonished that Bustamante was presenting on behalf of his members a three-page list of requests for pet projects as part of the $32-billion education budget.

In all, Hurtt said, Assembly Democrats’ education wish list added up to $100 million.

“Well, they don’t get that,” Hurtt said. “Speaker Bustamante is faced with a rookie delegation, and they’ve just overburdened the system with their ‘wannas.’ I’m just saying, ‘Learn how to say no, Cruz.’ ”

Added Sean Walsh, Wilson’s spokesman, “A lot of details have been covered. . . . We would like to focus on some of the big issues, and move the process forward.”

Asked about the requests, Bustamante said: “We are starting to get very close on the major issues on education. There are always going to be a few projects that members are looking for. But I think the major statewide activity is starting to get fairly close.”

Bustamante, Wilson and the other leaders met again Monday for less than two hours.

The negotiations are taking place in Wilson’s private office. For Lockyer, the frustration is starting to show. When a reporter asked him if this year’s budget impasse might set a record, he scowled, turned on his heel and stalked off.