Lawmakers and Wilson Reach a Deal on Budget

Gov. Pete Wilson and legislative leaders announced an end to California’s second-longest state budget deadlock Thursday and predicted that the final $68-billion spending plan would be put to a vote Monday in the Legislature.

Senate President Pro Tem Bill Lockyer, the main Senate Democratic budget negotiator, announced the deal even as Assembly Democrats continued their struggle to come to grips with a pared-down budget that lacks funding for many of the programs they had hoped to create and pump up with new money.

But emerging late in the day from a private meeting with Assembly Democrats, Speaker Cruz Bustamante (D-Fresno) acknowledged that he was in accord, saying, “Yes, we have a deal.

“In the difference between a ‘spend’ budget and a ‘cut’ budget,” Bustamante added, “we feel most of our constituents are protected.”

Sean Walsh, Wilson’s spokesman, said: “We are very pleased that it appears we have a broad outline of a budget agreement.” Though some “technical issues” remain, Walsh said, “all and all, we have an agreement.”

The final agreement came to fruition when Wilson agreed to Bustamante’s request to create a new state program to provide food stamps to about 36,000 children who are legal immigrants. The children stand to lose welfare benefits next month as a result of the welfare overhaul approved by Congress last year.

The program, which also would provide some food aid to about 14,000 elderly legal immigrants, will cost about $33 million. Additionally, Wilson agreed to boost food giveaway programs and medical aid in mostly rural areas heavily populated by immigrants. That will push the cost of the package to about $40 million.

Under the tentative arrangement, the new program would last for three years, while Wilson and lawmakers push the federal government to restore benefits to the legal immigrants.

“The governor felt it was important to protect children,” Walsh said. “This is why he is including a transitional program of food stamps for vulnerable children and the elderly.”

At the same time, Assembly Democrats agreed to continue funding for Wilson’s $100-million program to assist local police. Assembly Democrats had tied approval of the program to the accord on legal immigrants, even though few, if any, of them opposed the police funding program.

The budget deal came after long hours of anguish by Bustamante and other Assembly Democrats about the spending plan that falls short of their hopes. As late as midday Thursday, Bustamante visited Wilson asking for more money to aid local government, something many Democrats and Republicans had advocated.

The answer came back that there simply was no more money to spend, given that by law, the state’s budget must be balanced.

Lockyer also was pushing Bustamante and the Assembly Democrats to give final approval to the deal. Lockyer went on the Senate floor earlier in the day and announced that the Senate would vote on the budget Monday, even though, he told the senators, the Assembly was still considering the proposal.

“The last thing I said to Cruz,” Lockyer said, later recalling an afternoon conversation with the Assembly speaker, “was that ‘I know you’re one who believes in allowing for discussion and input from your Democratic caucus. It is now time to say, this is what we’re going to do--not what is your opinion.’ ”

Lockyer, Bustamante and the Republican leadership now must line up the necessary two-thirds vote to approve the spending plan. The budget is likely to win Senate approval fairly easily, and Bustamante said he believes he has sufficient votes to win passage in the lower house.

Sen. Richard Polanco (D-Los Angeles), another who had pushed for the aid to legal immigrants, lauded Bustamante’s effort, crediting the speaker’s “heart and gut” for winning the state aid for legal immigrants.

The package falls far short of the $120 million that Polanco, Bustamante and Assemblyman Antonio Villaraigosa (D-Los Angeles) initially requested. But Wilson long has opposed a state program for immigrants, contending that it is a federal responsibility.

“We think there has been movement on both sides,” Polanco said. Noting that the main beneficiaries will be children whose parents are farm workers, Polanco said: “We shouldn’t walk away from the people who put food on our table.”

The governor, increasingly impatient with the budget standoff, was holding out the threat that he would give nothing to legal immigrants, particularly if Democrats blocked his $100-million law enforcement subsidy.

“It’s very clear he was very prepared to drop another neutron bomb,” Villaraigosa said, a reference to Wilson’s decision last week to immediately pay off a $1.36-billion legal judgment after Democrats refused to support his proposed $1-billion tax cut.

Instead of paying off the judgment over 10 years, as Democrats wanted, Wilson decreed that the debt would be paid this year. As a result of that decision, lawmakers were forced to cut slightly more than $1.6 billion from the spending plan.

Earlier this week, the joint Senate-Assembly conference committee announced that it had removed $1.6 billion from various programs.

Word of the apparent budget deal came 38 days after the July 1 start of California’s 1997-1998 fiscal year, the deadline set in the state Constitution for having a budget in place.

The budget impasse, an annual rite in Sacramento, is the second longest in the state’s history, trailing only the 1992 deadlock. That one came when the state was strapped at the height of the recession, unlike this year, when state coffers have a $2.3-billion bounty as a result of the strong economy.

As it now stands, the spending plan includes no tax cuts for individuals or businesses. Democrats opposed the tax cut, contending that it would damage public schools.

Under the budget deal, schools stand to receive $32 billion in state and local money, a record sum. The school spending plan includes enough money to continue Wilson’s class-size reduction initiative begun last year in the lower grades.

Additionally, in a proposal pushed by Sen. Steve Peace (D-El Cajon), there will be at least $50 million in the budget to extend class time for students by one day, and possibly two days.

Now, most school districts in California grant teachers eight so-called in-service training days. On those days, students have the day off, while teachers undergo training.

Under Peace’s plan, teachers would still have eight training days. But at least one of those days would occur during what otherwise would be a vacation day for students. Peace says his goal is to have all eight training days occur outside regular class time, so students would attend 180 days of class in a year.

Some other provisions of the tentative deal include:

* No fee increases at California state universities and colleges.

* A $1 fee hike for renewing car registration, plus additional fees imposed by the Department of Motor Vehicles amounting to $50 million.

* A new program to provide $75 million for private hospitals that provide a disproportionate share of care to the uninsured.

* A $2.5-billion deal to reinforce the San Francisco Bay Bridge to protect it against earthquakes. The money also would be used to make seismic reinforcements on 10 other major bridges in the state.

Under the deal struck by Lockyer and other Bay Area lawmakers, Bay Area commuters will face a doubling of their bridge tolls to $2. About $78 million that would otherwise be used on Southern California transit programs will be shifted to the bridge projects.

“It’s not a bad deal,” said Assembly Transportation Committee Chairman Kevin Murray (D-Los Angeles). “If [Lockyer] was from Southern California . . . it would be a different deal.”

The impasse has wrecked lawmakers’ plans for vacations during what was supposed to have been a monthlong summer recess. Adding to the pressure to adopt the budget, the longer the debacle continues, the deeper the embarrassment becomes for lawmakers, many of whom are serving their first term.

As it is, nursing home operators that care for more than 100,000 indigent elderly, mentally ill and developmentally disabled Californians have not been paid for more than a month. Nor have other private businesses that have contracts with the state. Many fear they will be unable to make their payrolls.

“We have all vowed we will never be in this position again,” said freshman Assemblyman Don Perata (D-Alameda). “We don’t have a budget and we can’t look our constituents in the eye and explain why.”

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Highlights of the Budget Deal

Gov. Pete Wilson and legislative leaders have agreed on a state budget, which now must be approved by a two-thirds vote of the Legislature. Here are the highlights of the tentative deal:

* No income tax cut

* Education funding at an all-time high, roughly $32 billion in state and local money.

* A provision to increase class time for students by at least one day a year and possibly two.

* Continued funding of the class-size reduction initiative begun last year.

* Extension of a $100-million state program to aid local police.

* Approximately $33 million for a new state-funded food stamp program for legal immigrant children and some elderly residents, plus additional money for rural health and food programs, bringing the total to about $40 million.

* $75 million in new aid for hospitals that provide a disproportionate share of care to the uninsured.

* $1 fee increase for renewing car registration, plus additional DMV fees totaling $50 million.