Special Legislative Sessions Have an Open Agenda

Times Staff Writers

Shortly after he becomes governor of California around noon on Monday, Arnold Schwarzenegger will order the state's 120 lawmakers back to the Capitol for a series of special sessions. But exactly how those sessions will unfold -- only two days from now -- remains a mystery to leaders of the Legislature.

So far, there are no legislative proposals from the new Republican governor. Schwarzenegger has only promised to ask lawmakers to repeal a law that allows illegal immigrants to get driver's licenses, revise the workers' compensation system and realign an out-of-whack state budget.

Many lawmakers predict a quick repeal of the driver's license bill. But nobody expects the Legislature, with Democratic majorities in both houses, to so easily dispense with runaway costs in the workers' compensation system or a $10.2-billion budget shortfall.

Legislative leaders said they don't know whether the Senate and Assembly will hunker down to tackle those issues or largely disband after a quick meeting to set up committees that would hash out proposals. State law says that the governor "may cause" the Legislature to assemble, but once assembled, the Legislature sets its own rules.

"I don't know what's going on in the special sessions," said Senate President Pro Tem John Burton (D-San Francisco). "It's all hearsay."

If Schwarzenegger doesn't offer up detailed proposals for the Legislature to consider, he said, "then nothing will probably happen."

Assembly Speaker Herb Wesson (D-Culver City) said he hasn't heard yet either what Schwarzenegger will direct the Legislature to tackle.

"At this juncture, the ball is in his court," Wesson said.

Schwarzenegger spokeswoman Karen Hanretty said the governor-elect will indeed offer specific proposals when lawmakers reconvene on Tuesday.

In his first meeting with the top four Democratic and Republican leaders of the Legislature last month, Schwarzenegger promised "action, action, action, action."

A special session is designed to get a quick result from its action. Unlike the regular session of the Legislature, which doesn't resume until Jan. 5, a bill passed in a special session can take effect within 90 days after the session adjourns. Legislation approved by a two-thirds super-majority in a special session takes effect immediately. A Bills passed with a simple majority in a regular session do not usually take effect until the following year.

Driver's License Bill

In his campaign to oust Democratic Gov. Gray Davis, Schwarzenegger vowed to repeal a bill, SB 60, that would allow illegal immigrants to apply for driver's licenses. Davis signed SB 60 in September as he struggled to keep his job in the face of a recall campaign. The bill received no Republican votes in its final passage through the Legislature. Critics accused Davis of pandering to Latino voters, and polls showed widespread public distaste for the new law.

Republican groups have already sued to prevent the law from going into effect in January. They have also begun gathering signatures to ask voters to overturn it when they go to the polls in March, in case the Legislature fails to act. Schwarzenegger calls the law too lax to stop fugitives or terrorists from getting driver's licenses.

The bill's author, state Sen. Gil Cedillo (D-Los Angeles), said he has been "working around the clock" to find consensus on how to address those concerns while still ensuring that the estimated 2 million illegal immigrants living and working in California get driver's education and insurance.

Cedillo said Schwarzenegger and his aides haven't responded to offers of compromise.

"I just don't get a sense that they appreciate -- other than its unpopularity -- the magnitude and the importance of SB 60 to the people of California," Cedillo said.

Democratic lawmakers have yet to meet to discuss their strategy on the driver's license bill.

The Democratic majority has three choices: accede to Schwarzenegger's demands and repeal the legislation without conditions, repeal it only with assurances that Republicans will later support a compromise version, or stand behind the bill and face the strong possibility that voters will kill it at the polls.

Republican lawmakers say they believe enough Democrats will vote to repeal the law, in part because they don't want it to be a campaign issue in March.

"I don't think Democrats want that being on the ballot at the same time someone can vote for or against them," said Assemblyman Kevin McCarthy (R-Bakersfield), who will become Republican leader of the lower house in January.

Even many Democrats predicted the law would be overturned, at least in the Assembly.

"It could happen, yes, it could," said Assemblywoman Jackie Goldberg (D-Los Angeles). "I would prefer that we keep face with the people we told could get a license and deal with any problems [Schwarzenegger] has with it," she said. But Goldberg predicted that eight or nine Democrats in the Assembly are probably ready to join Republicans and rescind the bill.

The legislation's fate in the Senate is less clear.

"Obviously, the Republican plan would be to pick off some Democrats," said Sen. Martha Escutia (D-Whittier). "I've been talking to a lot of members. Maybe the votes are there, maybe the votes are not. I will not vote to repeal, under any circumstances."

Sen. Dean Florez (D-Shafter) has described himself as a moderate Democrat and potential ally of the new governor, but he said he won't vote to repeal the driver's license law without accompanying legislation that would allow illegal immigrants to get licenses while addressing security concerns.

"It's a test to see whether this governor is going to work cooperatively with the Legislature or go it alone," he said. "I think it's going to be the first lesson for the governor on checks and balances. He wasn't elected to be king of California."

Lawmakers such as Sen. Mike Machado (D-Linden) who are targeted by Republicans for ouster walk a fine line on the issue.

"He's open to going ahead and repealing it," said Machado spokeswoman Jody Fujii, with the caveat that Republicans commit to a compromise measure.

Even a special session won't be speedy enough to block the driver's license law from taking effect at least briefly next year if lawmakers don't pass a bill to repeal it by a two-thirds super-majority.

Workers' Compensation

There's no legislative urgency -- but plenty of urgency among California employers -- to reform the workers' compensation system.

In September, lawmakers passed a package of bills designed to pare $5 billion in medical expenses from the system, which has ballooned in overall cost from $9 billion in 1995 to $29 billion this year. Schwarzenegger has called that recent overhaul inadequate -- a charge that prompted Burton to threaten to introduce legislation to repeal all of it, even though the bills allowed employers to avoid an estimated 12% hike in January in the rates they pay for workers' compensation insurance.

Sen. Richard Alarcon (D-Sun Valley), chairman of the joint legislative committee on workers' compensation, said Schwarzenegger has yet to clarify whether he will seek the repeal of the Legislature's hard-fought package of cost-cutting bills.

Insurance Commissioner John Garamendi, who has discussed workers' compensation reform with Schwarzenegger, predicted that the new governor would target the permanent disability component of the system.

California workers who are permanently disabled on the job are entitled to receive compensation for up to $490 a week for life, depending on the severity of the injury. But critics, including Garamendi, say the method for determining just how badly a worker has been injured is far too subjective and litigious. Sometimes seriously injured workers end up getting skimpier benefits than those with relatively minor injuries.

Besides being unfair, critics contend, the system for determining temporary and permanent disability is costly, with the average claim costing 40% more than in the typical state.

Schwarzenegger is also likely to consider ways to curtail litigation costs, Garamendi said.

Garamendi suggested that the Legislature finish its work on workers' compensation by the end of March so that cost-saving measures can be in place before insurers set new rates in July.

Alarcon called that deadline reasonable.

State Budget

The new governor will need fast work by the Legislature if he decides to pursue voter approval of a bond of at least $20 billion, as advisors have suggested he will. To put such a proposal on the March ballot, the Legislature must act by Dec. 5.

Such a bond is a definite possibility, said Assemblyman John Campbell (R-Irvine).

If approved by voters, the borrowing would simultaneously sanction $13 billion sought to balance this year's budget and also raise the cash to help balance next year's budget. Paying off that sum over the next 30 years could cost taxpayers an additional $20 billion in interest and fees.

Democrats who have argued for a combination of tax hikes and spending cuts to balance the budget are certain to criticize more borrowing, and it may not sit well with Schwarzenegger's fellow Republicans, either.

"I would have a lot of concern about borrowing to balance another year's budget," said Assemblyman Keith Richman (R-Northridge). "What's critical is that we not only solve this problem but ensure we don't get into this situation again."

To address the chronic imbalance between what the state spends and what it collects in revenue, Schwarzenegger advisors say, he is also likely to propose a cap on spending. Richman also plans to introduce such a measure.

The state's budget imbalance will grow by $4 billion if Schwarzenegger keeps his campaign promise to repeal a vehicle registration fee hike on his first day in office. Local governments use that money to pay for police, fire and other services.

Sen. Jim Brulte (R-Rancho Cucamonga) said he expects Schwarzenegger to keep that money flowing to local governments by paring back other spending from the state general fund.

But he wasn't sure which immediate budget cuts Schwarzenegger might propose -- and whether he would need the Legislature to help. Last July, the Legislature passed a budget that gives the governor's finance director authority to make limited midyear budget reductions without legislative oversight.

"That's something the lawyers have to review," Brulte said. "I suspect that liberal special interests may try to litigate on that."

Times staff writer Marla Dickerson contributed to this report.

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