Assembly OKs State Budget in Stormy Session

After a day of outbursts, bickering and backbiting, the state Assembly on Tuesday approved California’s long overdue $76.9-billion budget with no changes to its major provisions, which include a $1.4-billion tax cut and a significant spending increase for public schools.

The Assembly approved the plan on a 65-13 vote, 42 days after the July 1 start of the 1998-99 fiscal year and the state constitutional deadline for having a budget in place. Republicans cast all 13 “no” votes.

On a 74-1 vote, the Assembly also approved a $1.4-billion package of tax cuts--even as several Republicans objected that the reduction, the largest in the state’s history, was far too small.

The entire budget blueprint, which governs state spending on everything from schools and parks to prisons and welfare, now heads to Gov. Pete Wilson. The Republican chief executive is expected to sign his eighth and final state budget into law next week--after using his blue pencil to veto about $500 million worth of spending on special projects.

The Assembly’s votes came in fits and starts over the last two days. The fighting in the lower house was in sharp contrast to the state Senate, which quickly approved the budget Monday, along with most of the related bills to implement the spending plan.

Pumped up by a $4.4-billion surplus courtesy of the state’s expanding economy, the budget raises spending for schools, welfare and the environment, and gives tax breaks to renters, families with dependents and motorists.

“This is a solid, common-sense budget that is a big win for taxpayers, for parents with children in school and for future employers who need an educated work force,” said Wilson spokesman Sean Walsh.

Assembly Republican Leader Bill Leonard of San Bernardino, who helped negotiate the spending plan with Wilson and other legislative leaders, praised it as a budget of “tax cuts and a budget of education appropriations targeted to reform.”

“Those are two good and very large reasons to vote for this budget,” he said.

Several times during the day, the session degenerated into bickering, accusations and general silliness. At one point, Republicans led by Assemblyman Curt Pringle (R-Garden Grove) ridiculed one of three Democrats who were pushing virtually identical bills to provide money for after-school programs.

The Democrats--Assemblyman Tom Torlakson of Antioch, Assemblywoman Debra Ortiz of Sacramento and Sen. Bill Lockyer of Hayward--were trying to muscle one another aside for the right to be the main author of the popular measure.

Later, when Assemblyman Lou Papan (D-Millbrae) pushed legislation that contained funding for several parks projects, Assemblyman Tom McClintock (R-Northridge) scoffed that the budget amounted to a “gluttony of pork.”

Assemblyman George House (R-Hughson) later attacked legislation to appropriate $28.5 million to help improve math teachers, charging, “It’s a throw-away. . . . Why do we have teachers with credentials who can’t teach fourth-grade math?”

After House, 68, recalled how he was taught in a small rural school and recited a lengthy poem--the point of which was lost on many members--Assemblywoman Diane Martinez (D-Monterey Park) responded: “Yada, yada, yada.”

Democrats said that much of the delay in voting was because Leonard was having difficulty rounding up sufficient votes for the budget among his members.

“You just never know with them,” Speaker Antonio Villaraigosa (D-Los Angeles), said of the Republicans. Leonard insisted, however, that Republicans simply wanted more time to read the thousands of pages that make up the budget.

Still, several Republican Assembly members were highly critical of the deal, arguing that the budget includes too much spending and that the tax cuts it contains are too meager.

“It’s quite clear that this budget reflects the spending lobby thumbing its nose at the California taxpayer,” said McClintock, who is among the most vocal opponents of the budget and cast the lone vote against the tax cut.

Although Wilson contends that the $1.4-billion tax cut for fiscal 1998-99 is the largest in the state’s history, McClintock countered by saying the growth in this year’s budget is “the biggest single spending increase of any state in history.”

Assemblyman Steve Baldwin (R-El Cajon) also took issue with Wilson’s statement that the combined tax cut package may be the biggest by any state in the country, noting tax reduction plans approved this year that amount to larger percentages of other states’ budgets.

“We have the honor of having the weakest one,” said Baldwin, who nevertheless “reluctantly” voted for the plan.

The main feature of the tax cut is a 25% reduction in the annual fee that Californians must pay to register their cars. That will save motorists $1 billion in calendar 1999. The tax plan also will increase the credit that Californians can claim on their 1998 state income taxes to $253 per dependent, up from $68 in 1997. That provision will save families $612 million a year.

The dependent credit affects as many as 3 million taxpayers with children or other dependents, such as elderly parents for whom they care.

The Assembly also gave final approval to an income tax credit for renters, a break that had been suspended as part of a $5.4-billion tax increase package aimed at filling a $14-billion budget deficit during the recession in 1991.

Under the new tax break, low- and moderate-income renters will save a combined $133 million a year. Individual renters will receive a $60 credit if they earn $25,000 or less. Couples who rent will receive $120 if their income is $50,000 or less.

The previous renters tax credit, which cost the state more than $500 million, granted payments to all renters, no matter how high their incomes and regardless of whether they had any income tax liability.

Still, adding up the savings from the car tax cut, the dependent care credit and the renters tax credit, Assemblyman Robert Prenter (R-Hanford) figured that some families could end up saving $1,000 in taxes next year.

“You’re talking real relief . . . for families that can really use the money,” Prenter said.

Wilson initially had wanted to halve the vehicle tax beginning in January, then reduce it by 75% in 2001 for a total savings of $3.6 billion.

Democrats, however, opened budget negotiations by opposing any car tax cut before ultimately agreeing to the 25% reduction. The decrease will affect motorists who register their cars after Jan. 1.

Californians currently pay 2% of the value of their cars, trucks, motorcycles and trailers when they register their vehicles each year. The car tax cut could deepen at yearly intervals starting in 2001, and continue through 2003, as long as California’s economy remains strong. By 2003, the car tax could be reduced by 67.5%, for an annual savings of $3.2 billion.

Democrats won a victory by insisting that future car tax reductions take effect only if the tax revenue flowing to Sacramento exceeds current forecasts by several billion dollars.

“More than anything, we were able to complete the budget negotiations without mortgaging the future,” said Villaraigosa, who helped fashion the spending plan along with Wilson and the other leaders of the Senate and Assembly.

In addition to the tax cuts, the $76.9-billion budget includes roughly $25 billion in state money for schools, $2.5 billion more than was spent last year, plus $5 billion for state universities and colleges, a raise of more than $700 million.

The $230-million rise in payments to welfare recipients, a step taken after Wilson and the Legislature imposed cuts through much of the 1990s, offers a 7.9% increase in monthly checks. That would give a mother with two children in urban California $611 a month, up from $565 a month last year.

Pushing for the increase, Assemblywoman Dion Aroner (D-Berkeley) pointed out that 10 years ago, a family of three received $694 a month--”lest you worry that we’re being too generous.”

“This year we are finally taking the fiscal distress off these families,” she said.

Times staff writer Max Vanzi contributed to this story.