Senate Approves Placeholder Budget

In a tactical move intended to keep the state budget moving forward, Senate Democrats on Monday forced a skeleton California budget through the upper chamber, stripping the bill of its specifics and thus ducking for the moment a looming inter-party fight over how to balance the state’s finances.

Democrats easily overcame Republican opposition to the bill and sent it to the Assembly, but to get the measure through, all sections of it that specified how money would be spent were removed. An urgency clause that would allow it to take effect as soon as the governor signed it was also dropped.

The result was that the legislation represented little more than a placeholder to put the budget before a conference committee that can begin debating it later this month.

The tactical maneuvering came at the outset of a busy week in the state Capitol, where legislators are working to get their bills approved by their own chambers by Friday’s deadline and leaders of both parties continue to circle each other on the budget, toning down some of their combative rhetoric but not yielding on their basic positions.

Financial institutions are watching with interest and concern as the state is preparing to borrow $11 billion to pay off notes that are coming due over the next several weeks.

On Monday, Democrats easily overcame Republican opposition and sent the estimated $103-billion budget to the Assembly on a party-line 25-15 vote. Despite the partisanship of the vote, however, the two chief antagonists, Senate leader John Burton (D-San Francisco) and GOP leader Jim Brulte of Rancho Cucamonga, said they are willing to meet to discuss possible compromises over the next few days.

Anticipating promised GOP opposition, Democrats struck from the bill the funds and urgency clauses, which require a supermajority of 27 votes. This action enabled Democrats to pass it with a simple majority vote, without Republican help.

The next move is expected when the Legislature’s final version of the budget is written by a Senate-Assembly conference committee. By law, Gov. Gray Davis is supposed to sign the budget by July 1, when the fiscal year begins.

As of Monday, the two sides still seemed far apart on the major issues. In the Senate, Democrats insisted that they have cut as much spending from the budget as they can without harming programs and individuals who depend on them. They backed Davis’ call for raising the state sales tax for four years by a half-cent to pay for a $10.7-billion deficit-reduction bond; Democrats say that would close the budget gap and still spare some programs.

Republicans, meanwhile, were standing fast on their pledge to fight any new taxes, which they say will harm California’s economy and delay recovery. They argued that further spending cuts should be made.

During the Senate debate Monday, however, there were some glimmers of a middle ground. Although neither yielded on substantive positions, Brulte and Burton each said they were willing to meet to discuss their differences.

Burton suggested that both sides sit down and agree on issues they could agree on and “get them out of the way,” leaving tax increases as the biggest and only unresolved problem.

“I understand the Republican point of view, but we are going to be down to the point of whether or not people would be wiling to vote for a temporary sales tax increase,” he told Brulte.

Brulte responded that “sometimes discussion is better than confrontation.” But he warned Burton against again trying to lure Republicans to defect and join Democrats in voting for a budget that included higher taxes. For the last three years, Democrats have successfully done so.

Brulte predicted that Democrats would attempt the same strategy, but that this time it would fail. If Democrats try, they should move quickly so “we can get about the business of doing a budget that balances without tax increases.”

As the Senate debated, there were some other signs of pressure to cut a budget deal in time this year.

A group of 18 Democrats and Republicans in the Assembly who have been meeting to draft a bipartisan budget solution handed out blue and yellow buttons to legislators reading “-13 Days.”

“Minus 13 days represents the fact that there are 13 days left to pass a state budget,” said Assemblyman Joe Canciamilla, (D-Pittsburg), who co-founded the bipartisan group with Assemblyman Keith Richman (R-Northridge). The two will pay the few hundred dollars for the buttons themselves or with campaign funds, staff said. Today, the group will hand out a new buttons: “- 12 Days” -- and will count down every day with buttons until the June 15 constitutional deadline for legislative passage of a budget.

In other actions Monday, the Senate approved measures to:

* Criticize Rep. Howard Coble (R-N.C.) for suggesting that Japanese Americans were locked up in internment camps during World War II for their own safety and some “probably were intent on doing harm to us.” The advisory resolution, AJR 30, by Assemblywoman Carol Liu (D-La Canada Flintridge) urges Coble to make an apology, something an aide said he has already done. The vote was 31 to 0.

* Establish California guidelines to determine if a person accused in a death penalty case is mentally retarded. The U.S. Supreme Court last year ruled that mentally retarded people cannot be put to death, but left it up to the states to establish the standards for determination of mental retardation. The bill, SB 3, by Burton was sent to the Assembly on a 24-13 vote. Davis last year vetoed a similar bill.

The Assembly, meantime, approved a bill, AB 1229, by Assemblyman Joe Simitian (D-Palo Alto) that was aimed at making the jobsite more conducive to “merit, not mating.”

The bill, sent to the Senate on a vote of 45 to 25, would make a supervisor liable for sexual discrimination charges if he or she gave a promotion, raise or other special benefit to a worker with whom he or she was having sex. He said the bill was aimed at rewriting a law under which a state appellate court found that no hostile workplace environment existed although a Department of Corrections supervisor was engaged in sexual relationships with three subordinates.

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Times staff writer Nancy Vogel contributed to this report.

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Decisive Dates

Key dates in the California budget debate:

This week: S&P; and Moody’s are scheduled to release ratings on $11 billion in revenue anticipation warrants -- short-term notes that are needed to pay off last year’s borrowing and to provide the state with spending money for the next two months. Because the state’s credit is so bad, those notes will be rated on the credit of investment banks, not the state, which needs a top-tier rating in order to attract investment.

* Thursday: UCLA releases economic forecast. Projections will help show whether the state’s estimates of job and income growth for this year and next are realistic.

* June 11: State controller sells the revenue anticipation warrants, which are needed for the state to stay solvent through the summer.

* June 15: Midnight is constitutional deadline for Legislature to pass the budget.

* July 1: New fiscal year begins.

Los Angeles Times