Republicans in Assembly Block Budget Approval

A day after Senate Republican lawmakers blocked passage of a $101-billion state budget, their Assembly counterparts followed suit, uniting against the spending plan.

The refusal of Republicans in both houses of the Legislature is expected to trigger a new round of negotiations on disputed issues, including a controversial demand by Republicans that a quarter-cent reduction of the state sales tax be preserved.

Republicans in the lower house cast 29 votes against the 2001-02 budget blueprint, with one Republican abstaining. The GOP action left the Democratic-controlled Assembly four votes short of the needed two-thirds majority, or 54 votes.

It also brought Gov. Gray Davis a day closer to missing a Sunday deadline for signing the document in time for the start of the new fiscal year.

The sales tax issue has unleashed an intense debate, with Republicans characterizing it as a tax increase that will hurt the California economy. Democrats dispute that portrayal, saying the tax’s reappearance is allowed by law.

Triggered for the first time this year under provisions of a 1991 statute, the quarter-cent tax is scheduled to return next year because of a slowing economy and a budget reserve that falls below the 4% level needed to keep the tax from being reinstated. Republicans want the Legislature or Davis to intervene and maintain the cut, at a cost of nearly $600 million during the first half of 2002.

But Davis administration officials say such action would be irresponsible given the state’s fiscal situation. Among other things, May revenues are down $66 million from projections. Sales tax receipts have fallen $149 million short of forecasts, while some other revenue sources have increased.

Democrats contend that if the Republican demand is granted, it would lead to cuts in programs ranging from education to trial courts.

“They have made claims that this budget raises taxes,” said Assembly Budget Chairman Tony Cardenas (D-Sylmar), who argued that the effect on consumers of a quarter-cent tax is barely noticeable. “Nothing could be further from the truth.”

But Assemblyman George Runner Jr. (R-Lancaster) countered: “Go ask the person who buys a car on Jan. 2 if they will experience a tax increase. They will.”

The debate in the Assembly dragged on for roughly four hours and took an unpleasant turn when Assemblywoman Carole Migden (D-San Francisco) lashed out at Assemblyman John Campbell (R-Irvine), whom she accused of dozing through a special meeting to put together the budget.

“Ms. Migden has suggested that I was asleep, I believe, during the conference committee and also suggested that I said that they had ignored a report,” Campbell said. “I never used the word ignored, nor was I asleep during the conference committee.”

“I think I said you were mentally asleep, and I stand by that remark,” Migden responded.

Migden later apologized to Campbell.

As Assembly lawmakers debated the plan, Senate leader John Burton (D-San Francisco) and Senate Republican leader Jim Brulte of Rancho Cucamonga met in Burton’s office, paving the way for their staffs to begin working on a variety of possible compromises. They range from redirecting $400 million in salaries from vacant state government jobs to cover the cost of the quarter-cent sales tax to making funding between urban and rural schools more equal.

“In the last 2 1/2 years, the population has grown by 5% and the general fund has grown by more than 35%,” Brulte said. “That is huge growth, and the idea that we have to raise sales taxes simply because government isn’t big enough is a fundamental disconnect between the two political parties.”

Senate Budget Committee Chairman Steve Peace (D-El Cajon) said that to maintain the quarter-cent sales tax dip, Republicans need to come up with $4.6 billion in cuts.

“I don’t know where the close is on this thing,” Peace said. “But I don’t think there is any serious political capital to be gained from this dialogue.”

Those comments reflected a growing sense of division between the parties.

Assembly Speaker Bob Hertzberg said GOP leader Dave Cox (R-Fair Oaks) had failed to present any substantive budget alternative and expressed no willingness to compromise on the tax issue.

Hertzberg said he planned to schedule Assembly sessions today and every day until a budget is passed, including July 4, if needed. He said he was willing to discuss the tax with Cox, as well as other ideas such as using the money from the tax to pay for programs supported by Republicans.

Hertzberg said he was also looking at a variety of unrelated issues he could tie to a vote, but he has already rejected a proposal by Republicans to link the budget vote to the redrawing of legislative and congressional districts.

And Hertzberg said he would continue to pursue what is traditionally the easiest way to pass a budget--peeling off a few members of the opposition party by sweetening the budget with projects for their districts.

Both Hertzberg and Peace suggested that the Republicans may be part of a national party effort to embarrass Gov. Davis, considered a possible challenger to President Bush in 2004.

Brulte brushed aside such talk.

“We are opposing a tax increase,” he said.

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Times staff writer Miguel Bustillo contributed to this story.