Senator Threatens Budget Gambit

With negotiations over a new state budget at a standstill, a key lawmaker said Friday that he’ll ask the Senate to vote on its own version of the spending plan regardless of whether a compromise plan with the Assembly is complete.

Senate Budget Committee Chairman Steve Peace (D-El Cajon) also said the Senate proposal may abandon Gov. Gray Davis’ plan to raise the vehicle license fee, instead adopting a proposal by Senate leader John Burton (D-San Francisco) to raise income taxes on the wealthiest Californians.

Peace described the Burton plan as the “option of choice” among Democrats but emphasized a final decision on switching the taxes has yet to be made. The Senate could vote on a spending plan, or at least parts of it, as early as Tuesday, Peace said. “We’re going to put a budget on the floor next week with or without the Assembly,” he said.

Peace adjourned a legislative committee negotiating a compromise budget on Thursday after Assembly Republicans thwarted a plan by Davis to shift $1.7 billion in education funding to help get the state out of the red. Republicans opposed the shift after Democratic leaders refused a GOP request to earmark, beginning in July 2003, about $1 billion to equalize funding among rural and urban schools and help school districts pay certain retirement benefit requirements.

Peace took issue with what he described as the Republicans’ failure to raise equalization funding with the committee, which has been meeting for three weeks.

“If they’re not going to raise the issue in the conference committee, what’s the point of meeting?” Peace said Friday.

Peace said he will not call a meeting of the full committee Sunday as he had planned unless there is an indication the matter in the Assembly will be resolved.

Removing the budget from the Senate-Assembly conference committee and taking it up on the Senate floor would allow upper-house lawmakers to insert the Burton plan to raise the highest individual tax brackets to 10% and 11% from 9.3%. Estimates of how much the plan would raise range from $2.5 billion to $3.2 billion a year.

Davis prefers to raise $1.3 billion in the next fiscal year by essentially doubling the vehicle license fees paid by motorists.

Assembly Republican Leader Dave Cox of Fair Oaks said that Republicans have pushed for better equalization in school funding for years and that the $1.7-billion funding shift proposed by Davis creates unallocated money that his caucus wants earmarked for equalization. He also said because the change would not take place until the following budget year he does not believe it’s a matter the conference committee needs to take up.