Official to Sue Over Budget Impasse

California’s superintendent of schools is expected to ask the state Supreme Court today to break the legislative impasse over how best to resolve a $38-billion budget gap because continued gridlock will threaten the education of 6 million schoolchildren.

A spokesman for Supt. Jack O’Connell said Wednesday that officials would use an argument similar to one that recently led the Nevada Supreme Court to grant Republican Gov. Kenny Guinn’s request to intervene in that state’s budget debate.

The court set aside Nevada’s constitutional requirement that a two-thirds legislative majority be achieved before a budget can be passed. California has the same requirement.

“It’s very much based on the Nevada ruling,” said Rick Miller, spokesman for O’Connell. “He thinks it is his obligation as superintendent to do everything in his power to make sure schools are properly funded.”

A suspension of the two-thirds requirement for passing a budget would allow Democrats to pass -- without Republican support -- a budget that contains a half-cent increase in sales taxes and a hike in the income tax for high earners. Republicans oppose any new taxes and have said they will not vote for any budget that includes them.

Gov. Gray Davis told O’Connell in a letter late Wednesday that although he and legislative leaders are close to a deal on the budget, he supports the superintendent’s petition.

“Today’s meeting [with legislative leaders] leads me to believe we are making real progress,” Davis said. “However, I think it’s perfectly appropriate for you ... to seek a Supreme Court order to protect our schoolchildren. Let me be clear: If a responsible budget is not on my desk in the near future, I will join you in that lawsuit.”

Earlier, Senate Republican Leader Jim Brulte of Rancho Cucamonga agreed that lawmakers are close to a deal.

“My sense is we’re moving forward, closer to an agreement,” said Brulte, who is working with Senate President Pro Tem John Burton (D-San Francisco).

“We don’t have one, but I think I know the parameters of an agreement, and I think Sen. Burton knows the parameters of an agreement,” said Brulte, refusing to expand on what those parameters are.

“We all want an agreement,” Brulte said of closing the state’s $38-billion budget gap. “We understand we have a major problem.”

Highlighting the governor’s diminishing role in budget negotiations, Burton skipped the meeting with Davis and the others so he could work with Brulte’s financial staff on possible compromises.

Many lawmakers expect that by month’s end Senate leaders will reach a compromise that relies heavily on borrowing through a complex revenue shift between state and local governments.

Such an agreement would avoid dealing with the state’s fundamental fiscal problem -- it spends more than it receives in taxes -- until some point in the future instead of incorporating the deep cuts Republicans want or the blend of lesser cuts and new taxes sought by Democrats.

The proposal is centered on a tax swap in which the state would take some sales tax revenue that currently goes to local governments and use it to finance more than $10 billion of the deficit into the next five or 10 years. The revenue taken from local governments would be replaced by giving them a larger share of property taxes. Even then, the state would have to make $2 billion more in cuts.

Some Democrats say if they continue to hold out for a new half-cent sales tax or a hike in the income tax for high earners, it could do more harm than good at this point. As long as there is no budget, roughly $1.5 billion in payments to local schools, public colleges and transportation projects cannot legally be made.

Those pushing for a quick resolution also said privately that they were alarmed by a Field Poll released Tuesday that reported only 19% of voters approve of what the Legislature is doing -- a record low.

State Controller Steve Westly warned again that the consequences of not reaching a resolution soon could be dire.

Westly said major lenders probably would accept the kind of stopgap budget that legislators anticipate. “I think that is something Wall Street will be OK with,” he said.

Westly and other Democrats already are positioning themselves to push for new revenues in the fall if none are included in a budget deal.

Those groups aim to raise billions by collecting sales tax for goods bought on the Internet, dismantling corporate tax shelters and abolishing a tax credit for manufacturers.

Times staff writer Cara Mia DiMassa contributed to this report from Los Angeles.