Senate Panel Slices Davis Budget Plan

A state Senate committee took an ax to Gov. Gray Davis’ proposed budget Tuesday, chipping away at environmental spending to double California’s emergency reserve.

The Senate action comes on the heels of a warning by Independent Legislative Analyst Elizabeth Hill that California could eventually face a $4-billion deficit if additional and deeper cuts are not made in the $102.9-billion spending plan that Davis unveiled this month.

A key point of contention in the Capitol is the size of the reserve the state sets aside for rainy days.

Members of the Senate Budget Committee approved a proposal by committee Chairman Sen. Steve Peace (D-El Cajon) to roughly double the $1-billion reserve sought by Davis to $2.1 billion. Peace outlined a plan that would return to the general fund roughly $200 million--much of which was previously allocated to the state’s Wildlife Conservation Board and the State Coastal Conservancy.

The general fund would also be bolstered by $727 million that has accumulated in nearly two dozen state accounts such as the Oil Spill Response Trust Fund and the Small Business Expansion Fund.

Committee members approved the Senate version of the 2001-02 budget Tuesday on a 9-3 vote, paving the way for the full Senate to take up the plan as early as Thursday.

The Assembly Budget Committee on Tuesday passed a version of the budget that relies on more generous revenue estimates--about $650 million more--than assumed by Davis or the Senate. The Assembly plan contains a $1.9-billion reserve and is scheduled to be taken up by the full Assembly on Friday.

A committee that will include members of both houses is expected to begin meeting next week to hash out a final proposal.

Members of the Assembly Budget Committee split along party lines in approving their budget plan, with Republican members calling for a quarter-cent reduction in the sales tax and a larger reserve.

“This is a time when we should be saving money, not spending more,” said Assemblyman George Runner, the Lancaster Republican who is vice chairman of the committee.

Peace said his goal is to build a reserve of at least $3 billion. The larger reserve, he said, is necessary to avoid a deficit. In the early 1990s, lawmakers wrestled with a $14-billion shortfall that prompted them to increase taxes by $7 billion and cut the budget by an equal amount.

“That’s an experience that most of the members of this Legislature have not gone through,” Peace said. “It’s not an experience I would wish on any of us.”

Sen. Dick Ackerman, the Irvine Republican who is the Senate Budget Committee’s vice chairman, also favors a more substantial surplus.

“We have to maintain an adequate reserve,” Ackerman said. “I think the energy situation is going to be a continuous problem.”

California’s coffers have been drained by more than $6 billion used to pay for electricity purchases. The agencies that were the target of the Senate’s cuts Tuesday quickly issued warnings of doom and gloom.

Al Wright, executive director of the Wildlife Conservation Board, said the Senate proposal to take back $132 million that had previously been allocated to his board would be tough to take.

“It will certainly have a big impact on our ability to acquire lands for habitat conservation as well as restoration in the state,” he said.

The money includes $30 million for the UC Merced Grassland Project, which according to Wright seeks to protect pools of water around the proposed campus that are home to unique plants and animals.

Added Dick Wayman, a spokesman for the Coastal Conservancy: “We understand sacrifices need to be made, but in any event, removing $54 million from our budget would have a very significant effect on our work on the coast.”

The cuts proposed by Peace include one for $300 million, which reflects the elimination of vacant positions at state agencies. An additional $180-million reduction represents a decrease in vehicle license fee payments to local governments because of slowing auto sales.