Legislature Approves $67-Billion State Budget

SACRAMENTO — The Legislature approved California’s new $67-billion budget Monday, drawing to a close the second-longest budget impasse in the state’s history.

Gov. Pete Wilson was expected to sign the spending plan into law, but not before Thursday.

Even as the Legislature approved the budget, Wilson threatened to withhold his signature unless lawmakers agree to his wording on one of about 40 budget-related bills. The measure in question would require a single statewide assessment test for public school students.

Wilson views the testing bill as important to his political legacy and ambitions, believing it would show that his education initiatives have paid off. Lawmakers worked into the night in an effort to resolve the differences.

The Assembly approved the spending plan on a 58-15 vote, while the Senate voted 30 to 6 for it. The Senate tally was three more than required to achieve the needed two-thirds majority, and the Assembly put up four more votes than necessary.

The budget for the 1997-98 fiscal year has no tax cut, but does include a record $32 billion for public schools. The budget also contains a welfare overhaul that, when job training is counted, will cost the state $223 million more than was spent last year, the legislative analyst’s office said.

“Education was enriched dramatically. Higher education was preserved,” Senate Budget Committee Chairman Mike Thompson (D-St. Helena) said, urging support. “[Environmental programs] were enhanced. And welfare was reformed. This is a good budget.”

After weeks of harsh words, back-room meetings and brinkmanship, the final debates in both houses were relatively bloodless and unemotional. The anticlimactic speeches followed weeks of failed negotiations over a tax cut offered by Wilson. In addition, Democrats failed in their efforts to win a pay raise for 200,000 state workers.

With the economy growing, state coffers are full. The Department of Finance believes that the budget will be about $67 billion. The legislative analyst’s office on Monday estimated that the budget will total between $67.8 billion and $68.8 billion, an increase of about $4 billion over last year.

But a spending spree envisioned by lawmakers and Wilson ended abruptly when Wilson, impatient with the budget deadlock, decreed that a $1.36-billion legal judgment owed the state workers’ pension fund be repaid this year, forcing lawmakers to hurriedly cut about $1.6 billion from the final budget. The result pleased few.

“I view this as a budget that is necessary and has some good things in it,” said Senate President Pro Tem Bill Lockyer (D-Hayward), the Senate Democrats’ main budget negotiator.

“Nobody got everything they wanted,” added Assembly GOP Leader Curt Pringle of Garden Grove, who led Republican lawmakers in the budget talks. “It is a conservative budget. We paid our debts. We protected education. There are no bells or whistles.”

Senate and Assembly opposition came from liberals who wanted more money spent on social programs and local government, and conservatives who oppose state funding of abortions and fretted about an emergency reserve of less than $50 million.

Antiabortion Republicans failed in what has become an annual effort to block the budget. This year, the amount spent on abortions for poor women will be $38 million, equating to about 10,000 abortions a month, said Sen. Richard Mountjoy (R-Arcadia).

“I don’t know how people live with that,” Mountjoy said, his voice cracking.

The budget includes $40 million for legal immigrants, far less than the $120 million that Speaker Cruz Bustamante (D-Fresno) initially sought. Still, the money represents one of the few new social programs approved in years, and includes food stamps for legal immigrant children and elderly people who have been cut off from federal aid.

The one clear winner this year is education. Its record $32 billion in state and local revenue means that spending will rise to $5,144 per student, a $240 increase from last year, but still $1,000 below the national average, education lobbyists contend.

The education budget includes $850 million to expand Wilson’s class-size reduction program begun last year, ensuring that most school districts will have 20 students per teacher in kindergarten through third grade, rather than the past standard of 32 students per teacher.

Lawmakers preserved a special $67-million subsidy for the University of California and California State University systems, so there will be no tuition increases for another year.

The community college system also won big, receiving nearly $2 billion, a $500-million increase from last year. Much of the money will be used to help train welfare recipients for jobs.

Among its other provisions, the state budget includes:

* State aid of $100 million for local law enforcement, including $21 million for police, prosecutors and jailers in Los Angeles County, $6.1 million for Orange County, $3.1 million for Riverside County, $3.6 million for San Bernardino County and $1.6 million for Ventura County.

* No additional money for local government. Wilson initially proposed giving local government $100 million, and lawmakers held out for $280 million.

* A new $75-million spending program to subsidize hospitals that care for large numbers of uninsured patients.

* No money for new prison construction, for the third year running, despite an inmate population that tops 150,000. The state will spend about $60 million on juvenile halls and camps.

* A possible $1 increase in fees for registering cars, and a $5 increase in car title transfers. A bill to implement the fee increases was stalled in the Senate.

The Senate’s budget vote came in the early afternoon, though senators were expected to work until the early morning hours today voting on bills that implement the budget’s various parts.

The Assembly budget vote came at 6:30 in the evening, after members debated the budget privately for several hours. In recent years, the budget did not pass in the lower house until well after midnight.

Explaining the relative ease of the final Assembly passage, Assembly Budget Committee member Martha M. Escutia (D-Bell) said: “It’s not a spend-budget. It’s a cut-budget. You get what you can, and scram.”

Even at that, there were surprises. Assemblyman Bill Leonard (R-San Bernardino), who soon will succeed Pringle as Assembly GOP leader, voted against it, citing the use of state money for abortions and the possible DMV fee increases.

“More bad than good,” Leonard said.

This summer’s budget standoff is the second-longest in the state’s history, passed only by the deadlock of 1992, when the spending plan wasn’t signed until Sept. 2. The state Constitution says California must have a budget in place by July 1, the start of the fiscal year. By law, legislators should have approved the budget and sent it to the governor by June 15.

As the Legislature approved the budget, new details emerged about the private struggles that led to the final deal.

Last Wednesday, Thompson tried to convene the Senate-Assembly budget conference committee, and force the two Assembly Democratic members to appear to make the final cuts.

The two Democrats--Assemblywomen Escutia and Denise Ducheny (D-San Diego)--were sitting with Bustamante in the speaker’s conference room with the lights out, in the futile hope that they could wrench more money for their programs.

Thompson grew so frustrated that he directed the sergeants at arms to go to the basement garage and remove the keys from the state cars assigned to Ducheny and Escutia.

Late that night, Lockyer eased the tension by retrieving the keys, giving them to Bustamante, and directing that the conference committee adjourn for the night.

That allowed Bustamante to ask Wilson a final time for more money. When that failed, the speaker met privately with Assembly Democrats to tell them that he could get no more. He became so emotional that he choked up, according to Democrats.

On Monday, Thompson tried to smooth over feelings by delivering pewter key chains embossed with the Senate seal and his name to Ducheny and Escutia.

This year’s budget debate was shaped when Wilson in mid-July proposed that lawmakers approve a $1-billion income tax cut. Democrats refused, contending that the tax cut would have taken $500 million a year from public schools.

Wilson then broke off talks aimed at settling the $1.36-billion judgment and ordered that it all be repaid this year, rather than over 10 years as he initially had proposed. That forced lawmakers to cut nearly all extra money from the budget.

The judgment stemmed from a suit by trustees of the $115-billion California Public Employee Retirement System over a decision by lawmakers and Wilson to delay payments into the state pension fund in 1992 and 1993.

Times staff writers Max Vanzi and Eric Bailey contributed to this article.

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Paring the Budget

The state budget for fiscal 1997-98 is a stripped-down spending plan. Proposed additions to many existing programs have been cut back. Some of the key cuts:

* Aid to local government: $402 million

* Health and welfare, including care for the mentally ill and developmentally disabled: $298 million

* Pay raise for state workers: $250 million

* Youth and adult prisons: $200 million

* Environmental programs: $159 million

* Trade and commerce: $82 million

* Public schools and universities: $66 million

* Courts and state Department of Justice: $43.3 million