Davis seeks support for risky budget proposals

By Alexa Haussler The Associated Press
Tuesday May 21, 2002

SACRAMENTO — Gov. Gray Davis’s budget contains some hot-button proposals that require legislative approval, and his administration has launched an all-out public relations effort to try to sell them. 

Legislative budget panels are to begin poring through the Davis plan this week. 

Monday, Davis aides and a cadre of high-powered education lobbyists pressed lawmakers to approve quickly a complicated plan to shift $1.7 billion in K-12 costs from this year to next, warning that the alternative would be crippling cuts or tax increases. 

“California schools cannot afford a prolonged budget stalemate this year,” said Barbara Kerr, vice president of the California Teachers’ Association, the state’s largest teachers’ union. 

Davis proposed a $98.9 billion budget plan last week that would borrow and shift money, cut $7.6 billion in spending and raise taxes on vehicle licenses and cigarettes. The plan seeks to fill in an expected $23.6 billion budget shortfall. 

The proposal includes the shift in education money between the current budget year and the next one, which begins July 1, to fulfill the school spending requirements of Proposition 98. The maneuver requires approval by June 30 of two-thirds of the Legislature, which must include four Republican Assembly members and one GOP state senator if all Democrats vote for it. 

Davis’ budget plans assume the measure will pass, and, if it doesn’t, finance officials said they must scramble to find the $1.7 billion elsewhere. 

“This is a pretty big piece of the overall budget solution,” said Betty Yee, chief deputy director of the state finance department. 

Education advocates “are really concerned about are games of legislative chicken being played in an election year that could jeopardize the fiscal position of the state,” said Kevin Gordon, executive director of the California Association of Business Officials. 

Republicans have not publicly expressed strong opposition to the plan, except to question whether it drains money from schools in the coming year. 

The education issue is one of a handful of hurdles Davis must overcome before he can sign a budget in an election year when the economy has wrought havoc on the state treasury. 

The most contentious is $1.75 billion in increases to the state vehicle license fee — raising the average car’s tax by $84 — and boosting the cost of cigarettes by 50 cents a pack. Republican lawmakers have said they will not support a budget with tax increases. 

The budget also assumes that the state will issue $11 billion in bonds to repay the state treasury for energy purchases last year. 

The state spent more than $6.1 billion from its general fund last year to buy electricity for ratepayers. State power regulators approved plan earlier this year that allows state officials to sell roughly $11.1 billion of bonds. However, that proceeding has slowed as the state continues to negotiate with utilities to settle final components of the bond sale.