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Wilson, Democrats Tout Budget Successes

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TIMES STAFF WRITER

Gov. Pete Wilson, despite having failed to win a $1-billion tax cut, Friday called California’s budget accord a victory for fiscal restraint, and, turning wistful, said he would consider running for a third term if term limits didn’t preclude it.

Already planning for next year’s budget fight, Wilson said he will again insist on a general tax cut for Californians in January. As he did this year, the Republican governor said he plans to tie any agreement to grant pay raises to about 250,000 state employees to legislative approval of his tax reduction.

“They are entitled to [a pay increase]. I am willing to do it,” Wilson said. “It is simply unfair, though, to ignore the right of the people who pay their salaries to have some tax relief. It is very simple.”

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Wilson’s comments came a day after he and lawmakers agreed to end the second-longest state budget standoff in California history, and as legislators worked on budget-related bills in preparation for a vote Monday on the 1997-98 spending plan.

The budget that has emerged this summer calls for spending about $67 billion on everything from parks and roads to prisons and schools. It contains an emergency reserve of less than $50 million.

The budget had been projected to be $68 billion. But it changed dramatically after the governor failed to win Democratic approval of his income tax cut and responded by dropping the fiscal equivalent of a “neutron bomb.”

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Essentially, Wilson took all extra money out of the budget by decreeing that a $1.36-billion legal judgment against California’s government won by the state employees’ pension fund be paid off in a lump sum this year rather than in payments strung out over 10 years, as Democrats wanted.

“The real winners out there are those who believe in restraint, responsibility and maintaining priorities,” Wilson said Friday. “This budget will again demonstrate that the state will live within its means.”

As a result of the decision to pay off the judgment, lawmakers were forced to make $1.6 billion in cuts to produce a balanced budget, as required by state law.

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However, the decision also means that there will be even more money to spend next year, and Wilson made it clear Friday that a tax cut will top his list of priorities.

“In order to prevent spending simply because the money is there, the surest way to do that is with a tax cut,” the governor said.

Wilson all but declared victory in this year’s budget debate--as have Democrats. A look at the document shows that what Senate President Pro Tem Bill Lockyer (D-Hayward) said at the start of the year--that the governor generally gets 90% of what he wants in a budget--proved true.

But both sides also share in the embarrassment that the agreement comes five weeks past the July 1 start of the fiscal year, the constitutional deadline for having a budget in place. In the end, Democrats and Republicans alike simply chose to declare success and end the prolonged deadlock.

The budget battle, of course, is not over. A two-thirds majority vote is necessary in the Senate and Assembly for final approval. Lockyer told senators that breakfast, lunch and dinner will be brought in Monday and said: “We’re not getting out of this room until we conclude.”

The Senate is expected to approve the budget easily when it reconvenes Monday.

The final budget debate probably will be more protracted in the Assembly, where the ability of Speaker Cruz Bustamante (D-Fresno) to control some Democrats remains in question.

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Some liberals are upset with the spending plan because they believe it doesn’t allocate enough funding for social programs. Conversely, a handful of Republicans will probably vote against it because it contains money for state-funded abortions.

Echoing the governor, Assembly Republican Leader Curt Pringle of Garden Grove, who appeared with Wilson at his news conference, predicted that the budget will appeal to most Republicans because of its restraint, as reflected by the decision to pay off the $1.36-billion legal judgment.

Pringle and Wilson also pointed to the record $32-billion budget for public schools and an assurance that there will be no tuition increases at California’s public universities and colleges.

The governor cited his decision to increase funding for his class-size reduction initiative begun last year, so schools can lower classes to 20 students per teacher in the first four grades.

Wilson also secured money for a statewide test to assess students’ progress, plus $50 million for more computers in high schools, and at least $50 million to add one and possibly two days of classroom instruction for most students.

While Wilson all but proclaimed victory, Democrats also pointed to what they say are their successes.

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“There is a lot in this budget that legislators can be damned proud of,” said Senate Budget Committee Chairman Mike Thompson (D-St. Helena). “There’s a lot our constituents can be proud of in this budget.”

Thompson cited major increases in state-funded child care to help people move off welfare, along with spending on education and various environmental programs.

Democrats did convince the Republican governor to fund a new state social program, a package that includes providing food stamps to legal immigrant children and some elderly.

However, the $40-million package represents less than a third of the amount in the initial proposal of Bustamante and other Democrats.

Wilson said he intends to use the line-item veto to delete any funding for illegal immigrants’ prenatal care. Democrats have included $8 million in the budget for such care, a decrease from their $32-million proposal.

Democrats’ one clear victory was killing Wilson’s $1-billion income tax cut, which he aimed at the middle class. In so doing, Democrats protected their highest priority, spending on public schools.

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As Wilson outlined what he sees as his various victories in the budget, he deflected a question about whether he intends to run for president in 2000 by talking about how much he is enjoying his current job.

“I regret that, in fact, term limits prohibit my seeking a third term,” Wilson said. Noting that he supported the 1990 term limits initiative, the governor said: “It seemed like a good idea at the time.”

He says he continues to support term limits. But if they were not in place, he said, “I would be much tempted [to run again]. I really would be.”

Past and current lawmakers are challenging legislative term limits in a lawsuit pending before the U.S. 9th Circuit Court of Appeals. A separate lawsuit would have to be brought to challenge term limits for governor.

On another topic, Wilson said he would oppose any campaign to unseat some state Supreme Court justices who voted this week to overturn a state law requiring parental consent before underage girls can obtain an abortion. Antiabortion activists, including some lawmakers, have called for the justices’ ouster in next year’s confirmation election.

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