Both Sides See Fiscal Plan as Little More Than a First Step

Democratic lawmakers offered measured criticism of Gov. Arnold Schwarzenegger’s first budget Friday, describing it as unfair to poor and middle-class Californians while expressing optimism that they could work with the Republican chief executive to craft a spending plan acceptable to both parties.

Republicans praised the Schwarzenegger budget as necessarily tough but evenhanded.

Lawmakers from both parties agreed on one point: Once the Legislature gets through with the budget, the 2004-05 spending plan Schwarzenegger is constitutionally required to sign by July 1 is likely to differ significantly from the current document.

“This governor has shown a willingness to negotiate,” said Assembly Budget Committee Chairwoman Jenny Oropeza (D-Long Beach). “I’m viewing this as an opening proposal, and we’ll move forward from there.”

Democratic lawmakers particularly took exception to parts of the budget that they said would harm the state’s poorest citizens, students and middle-class families, including cuts in health programs and increases in university and community college fees.

Republicans’ reservations included questions about Schwarzenegger’s proposals to shift $1.3 billion in property taxes away from local governments and to divert transportation funds from projects.

“I think the governor’s taken a good first step to resolving the budget deficit we face,” said Assemblyman Keith Richman (R-Northridge). But, he added, “there’s a number of very difficult decisions that were made in proposing this budget, some of which I have concerns about.”

Local government officials accused Schwarzenegger of betraying his promise to protect police and fire services and vowed to fight his proposal to take funds from city and county coffers -- just weeks after the governor staged a jubilant news conference with local officials to announce that he would fully reimburse local governments for money lost when he reduced vehicle license fees in November.

Los Angeles Mayor James K. Hahn said that Schwarzenegger’s proposal to shift funds away from local governments would cost the city $45 million at a time when Los Angeles already is facing a potential $250-million shortfall and that it could result in layoffs and reductions in police and fire services.

“It’s perplexing to me that the governor would say that public safety is the top priority of the state of California and do something like this, that really jeopardizes our ability to provide public safety to our citizens,” Hahn said.

Fresno Mayor Alan Autry, a Republican, called Schwarzenegger’s budget proposal “fiscal Armageddon,” and warned of a populist revolt led by local leaders.

Although many Democratic lawmakers favor a spending plan that balances program cuts with a tax increase, Democrats -- a majority in both the state Senate and Assembly -- were restrained in their criticism of Schwarzenegger’s stated opposition to a tax increase.

“It’s not something that we’re going to draw the line on and say you have to raise taxes,” said Assemblyman Fabian Nunez (D-Los Angeles). “It is not a Democratic platform priority to raise taxes.”

Oropeza warned of a tough fight over some of Schwarzenegger’s proposals to cut social programs and increase university and community college fees.

“It’s contradictory, frankly,” she said. “He says he wants to grow the economy and grow jobs, but on the other hand he’s making it more difficult for people to get an education. The policy direction of his budget seems to target workers, poor people and young people who want to get an education.”

Republicans responded with coordinated statements of praise from members of the Senate and the Assembly.

“The governor has laid out a blueprint to restore opportunity,” Assembly Republican Leader Kevin McCarthy (R-Bakersfield) said in his statement. “These are difficult times, and a budget that makes difficult choices is the right thing to do. I applaud the governor for his leadership.”

Outgoing Assembly Speaker Herb Wesson (D-Culver City) pledged that Democrats “are not going to be obstructionists” in the budget debate. But he countered Schwarzenegger’s commitment to oppose new taxes with a vow to shift some of the effects away from the poor and middle class.

“It seems to me not everybody’s belt is being tightened” by the Schwarzenegger budget, said Wesson. “There has to be a more equitable approach.”

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Times staff writer Virginia Ellis contributed to this report.