Send Surplus to Schools, Senator Urges

The chairman of the Senate Budget Committee on Monday proposed that most of the surprise windfall of $750 million in state revenue be funneled to financially strapped local government programs and schools.

The recommendation by Sen. Alfred E. Alquist (D-San Jose) represented the first solid legislative proposal to distribute the money since the “excess” money first surfaced late last month.

Unless the Legislature and Gov. George Deukmejian reach an agreement on how to divvy up the windfall, the lion’s share, about $564 million, automatically will flow to public schools on July 1, under terms of the Proposition 98 education finance ballot initiative enacted in November.

“By insisting on money that legally is due them on July 1, the education community easily can be viewed as insensitive and unfair, while other communities--particularly the poor, the old and the infirm--lack proper care,” Alquist told the committee. “We cannot afford to let other legitimate needs of the state starve while the education community receives an unfair proportion of available resources.”

Alquist did not offer his plan in the form of legislation but sketched the proposal’s broad outlines verbally and asked members of the committee to consider them and return to him with any comments.

Some Democrats indicated qualified support for the plan, but said they needed more details. Republican Sen. John Seymour of Anaheim, however, said other major fiscal issues confronting the Legislature remain to be dealt with before most Republicans would embrace the Alquist proposal.

Alquist proposed that $300 million of the windfall be channeled to kindergarten through community college education. Another $250 million would be handed over to counties in no-strings-attached bloc grants.

The remaining $200 million would be placed in the state budget’s reserve fund for expenditure in the new fiscal year starting July 1.

Presumably, the counties, in turn, would be expected to spend the funds on physical and mental health care programs, trauma centers, the medically indigent and the homeless.

The unanticipated revenue was generated chiefly by surprisingly high income tax payments for 1988.