Emergency Bill Is Signed to Keep State in Business

Scrambling to avert the potential chaos of a state government shutdown, lawmakers passed emergency legislation Wednesday allowing billions of dollars in spending to keep the state operating for the next two weeks, pending an accord on a new state budget.

Gov. Pete Wilson promptly signed the bill, allowing Controller Kathleen Connell to issue checks for everything from welfare for 2 million Californians to the state payroll for 210,000 workers to long-term debt payments.

The special $19-billion appropriation, approved unanimously by both houses of the Legislature, allows the state to cover its obligations dating to July 1, the start of the new fiscal year and the legal deadline for the signing of the budget. The temporary funding expires Aug. 5.

Wilson had urged passage of the legislation in response to a Los Angeles judge’s sweeping order Tuesday prohibiting Connell from paying state bills until a budget is signed or an emergency appropriation was made.

The governor was noncommittal on whether he would approve an extension beyond Aug. 5 if he and lawmakers fail to agree on a budget by then--raising the possibility that the crisis has only been postponed.

“If we want to see prison guards unpaid,” Wilson said, “if we want to see children, the disabled, the elderly unable to receive a grant upon which they depend, then the thing to do is to fail in what is this basic duty.”

The governor had planned to resume closed-door talks with leaders of the Assembly and Senate on a new budget, now more than three weeks past the deadline imposed by California’s Constitution. But the session was postponed until today to give Senate Democrats extra time to revise their budget proposal.

The gulf remains wide between the Democrats on one side and Wilson and Republican lawmakers on the other. The governor is pushing to use much of the state’s $4.4-billion surplus to finance a tax cut that would total $3.6 billion when it was fully phased in after the turn of the century. Democrats want a tax cut capped at $1 billion a year.

Even as the Legislature was moving swiftly to keep the state operating, lawyers for Connell appealed directly to the state Supreme Court, urging that the justices overturn the Superior Court order issued Tuesday that had barred her from paying state bills.

By asking the high court to intervene, Connell said she was increasing her chances of obtaining a ruling that would “not only be favorable to the state but would be more timely.”

“We must resolve these legal issues in court, and we must prevail,” Connell said.

Unions File Appeal in State Court

Unions representing state workers turned to the state Court of Appeal in Los Angeles, filing a separate appeal of Tuesday’s order by Superior Court Judge Robert O’Brien.

“We’re trying to cover all the bases,” said attorney Steve Bassoff, representing state engineers, scientists and others.

Lawyers who filed the taxpayers’ lawsuit leading to Tuesday’s decision predicted that Connell and the unions would fail to convince the higher courts to step in, now that the Legislature has acted on the immediate problem.

“The Legislature can pass emergency legislation,” said Century City attorney Richard I. Fine, who brought the taxpayers’ suit. “And if there is another cure available, courts for the most part stay out.”

The urgency legislation by Sen. Ken Maddy (R-Fresno) passed 32-0 in the Senate and 61-0 in the Assembly. The $19 billion whose expenditure it authorizes includes state tax money as well as payments that come to Sacramento from the federal government and are turned over to counties, cities and schools.

Maddy initially had proposed legislation to permit the state to pay vendors such as lawyers, doctors and other private concerns. In past budget fights, private vendors have not been paid.

After O’Brien’s ruling, Maddy’s measure was quickly amended to add authority to pay for all state operations. Maddy said the legislation ensures that “no one is going to be missed in terms of getting payments from the state.”

The one exception is legislators. The bill says they won’t get paid until after the budget is signed. The legislation does authorize pay for the governor, though an aide to Wilson said he won’t accept his check until he signs a budget. Lawmakers and the governor haven’t received their pay during other recent budget impasses.

The flurry of activity came a day after O’Brien, citing the constitutional requirement for a budget by July 1, issued a preliminary injunction blocking Connell from paying state employees, sending welfare funds to counties and paying most other state bills.

The judge’s order said state employees who showed up for work Wednesday and beyond had no guarantee about when they would be paid--a threat that was lifted for the time being when Wilson signed the special appropriation measure Wednesday.

No Reports of Job Actions

Nevertheless, there were no reports of job actions by state employees, although some members of one of the largest state unions, the California State Employees Assn., wore lapel stickers that read, “No Free Labor.”

“If something happens, let’s say a tanker goes down, somebody is going to need my help,” said Thomas Napoli, one of 11 state Department of Fish and Game hazardous material prevention officers.

Napoli, 36, must respond to calls at all hours at any spill into waters in Los Angeles and Orange counties. For the short term, he said of his financial situation, “I can suck it up a little.”

Labor leaders said that although state workers, who now find themselves directly enmeshed in the fight over the budget, remained on the job, there was increased anxiety and anger.

“Just consider anybody, in any kind of employment,” said Robert Katz, a deputy attorney general in Los Angeles. “If your pay isn’t coming in--and it’s not coming in while the state has a $4-billion surplus--there is a situation where any individual asks themselves, ‘Why should I continue to give my services when it is for nothing?’ I think that is human nature.”

Union leaders spent much of Wednesday taking hostile phone calls from workers, trying to quell misleading rumors and telling members to expect full pay for their work and to stay on the job.

Labor groups worried that many state employees have not prepared for a possible disruption in their pay by conserving money or putting off large purchases.

Now that workers might consider such steps, labor organizers said, the budget delay will take a bigger toll on employee morale.

“There are little conversations in the hallways,” Katz said. “People are worrying about things they shouldn’t have to worry about--how they pay the rent, how they put food on the table, how they put clothes on their kids. This is a bad thing, and it is misdirected.”

Contributing to this story were Times staff writers Max Vanzi, Dave Lesher and Amy Pyle in Sacramento, Alan Abrahamson in Los Angeles and Maura Dolan in San Francisco.

To get more on the state budget debate and participate in an informal survey, go to The Times’ Web site at: https://www.latimes.com/politics