$131-Billion State Budget Approved

Lawmakers Tuesday night adopted a $131-billion spending plan, meeting California’s budget deadline for the first time in six years.

The plan would use most of the $7.5-billion windfall generated by an unanticipated surge in tax receipts to boost school spending after years of cutbacks and to pay off a significant chunk of the state’s debt. The budget would also cut community college fees and expand law enforcement, social services and emergency readiness programs.

It also calls for sweeping changes to the state’s landmark treatment program for drug offenders.

The budget bill passed the Senate 30 to 10 after five Republicans joined Democrats in supporting the spending plan. Ninety minutes later, the Assembly approved the bill 54 to 23, surpassing the needed two-thirds majority. The budget now goes to Gov. Arnold Schwarzenegger.

“We should be proud of this budget,” said Assembly Speaker Fabian Nunez (D-Los Angeles). “Certainly, all of you that voted for it demonstrated to California that we could be fiscally responsible and morally responsible at same time. “

Earlier in the day, Schwarzenegger had called the prospect for an on-time budget “a huge victory for both parties, for Democrats and Republicans. But especially, this is a huge victory for the people of California.”

At the governor’s urging, the spending plan includes tough new provisions in the drug treatment program approved by voters as Proposition 36 in 2000, which gives tens of thousands of drug offenders the option of entering treatment facilities instead of going to jail.

The most controversial change would allow judges to put offenders who relapse into jail for up to five days. Such repeat offenders now have the option of avoiding jail and returning to a treatment facility.

Administration officials had warned that if such a change were not made, the governor would use his line-item veto authority to eliminate funding for the drug treatment program altogether. The change has angered treatment advocates, who launched an aggressive lobbying campaign against it.

“The thinking is, ‘We will make you want to quit by sending you to jail.’ If jail made people quit, we wouldn’t have a drug addiction problem,” said Margaret Dooley, a Los Angeles-based outreach coordinator with the nonprofit Drug Policy Alliance. “There is no evidence to support the idea that sending people to jail will have a positive outcome.”

Dooley said the Legislature’s move would also be illegal, because it would change a voter-approved measure without the consent of voters. Advocacy groups are preparing a legal challenge seeking to overturn changes. If the courts then block the provisions, they would be placed on the ballot for voter approval.

Supporters said the changes are needed to give offenders the incentive to stay clean. Assemblyman Dario Frommer (D-Glendale) said judges who deal with drug crimes told him that the system is too easily exploited by offenders and that the changes could give them more power to effectively enforce the law.

“This is a compromise measure we believe will move the goals of that program forward,” Frommer said.

Other provisions in the budget proved less controversial. There was no objection to repaying schools about $2 billion taken from them to help close deficits in recent years or to the proposal to accelerate repayment of $2.8 billion the state borrowed from other places.

Even though the final spending plan virtually mirrors the revised budget Schwarzenegger, a Republican, presented in May, several members of his party refused to support it.

Some fiscal conservatives said the spending package does not go far enough in bringing the state’s books into balance. Even with all the extra revenue and debt repayment, the state is still on target to spend more than it brings in by fiscal 2007-08. Current projections show lawmakers will be facing a shortfall of at least $3.3 billion for that fiscal year.

“We’re bursting through the ceiling with this budget,” said Assemblyman Chuck DeVore (R-Irvine).

“We’re not going to have the windfall next year that we have this year,” he said. “Mark my words, we’re going to have some very painful budgetary decisions to make next year.”

Assembly Republican Leader George Plescia (R-San Diego) acknowledged that the budget is not perfect but called it “about the best deal we could get this year.”

Republicans did block a $23-million proposal by Schwarzenegger to expand the availability of healthcare programs for low-income children. Several GOP lawmakers said they would not support the program because it would provide care to children here illegally.

Schwarzenegger said he would continue to push for the program outside the budget process. “We will revisit this,” the governor said. “Where there is a will, there is a way. We will get it done.”

Despite the division in his party, the budget is sure to aid Schwarzenegger’s reelection bid. The governor was elected to office on promises that he would fix the state’s fiscal problems, and the spending plan brings the state’s books closer to long-term balance than they have been in years. At the same time, it includes a number of new programs the governor championed.

Among them are measures to put more guidance counselors in schools, expand arts and physical education programs for children and allocate $200 million in emergency preparedness funding the state could use to get ready for an outbreak of bird flu.

The plan would also give a significant boost to transportation programs, allow the state to hire dozens more judges and provide $250 million for deferred maintenance at state parks.

Democrats are also claiming victory. They were able to secure cuts in community college fees, an expansion of foster care programs and a restoration of cost of living adjustments for the low-income elderly and disabled receiving state assistance.

The restoration of schools money also represents a victory for Democrats, who have long demanded that the state pay back the money taken from the education budget when Schwarzenegger first went into office.

Senate Leader Don Perata (D-Oakland) said lawmakers were careful not to use this year’s windfall to expand too many programs that would burden the state with bills for years to come. Such program expansions approved by the Legislature during the last revenue surge -- during the dot-com boom -- as well as tax cuts approved at that time were the root of the unprecedented budget crisis that the state is just now emerging from.

When the boom ended abruptly, the state no longer could pay for the programs, and lawmakers were confronted with a deficit of tens of billions of dollars.

“The Democrats learned from the past, which is not to spend money we have only one time,” Perata said.

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Times staff writer Nancy Vogel and the Associated Press contributed to this report.

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Key budget points

Highlights of the roughly $131-billion spending plan:

* Repays $2 billion that the state borrowed from schools.

* Sets up early repayment of $2.8 billion in other state debt.

* Reduces community college fees from $26 to $20 per unit by spring 2007.

* Includes $250 million for deferred maintenance at state parks.

* Allocates $126 million for new law enforcement programs.

* Includes $75 million for expanding programs for foster youths.

* Contains no new taxes and no new borrowing.

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Source: Legislature, governor’s office

Los Angeles Times