SACRAMENTO — Gov. George Deukmejian on Friday signed legislation to finance until January important programs for schools, the disabled, medical aid for the working poor and welfare services for children. But he told the Legislature that it must find the money to continue the programs thereafter.
In doing so, the Republican governor prolonged the election-year controversy with Democrats and public employee unions over his plan to spend about $300 million in "surplus" pension funds to fully finance the programs for the rest of the fiscal year.
Before signing two major bills designed to restore funds that he had vetoed last June from the state's $37.4-billion budget, Deukmejian reduced the appropriations by half, thus providing state money needed to finance the programs only from last July 1 until Dec. 31.
"When the 1987 Legislature convenes (on Dec. 1), it is my intention to seek the remaining one-half of these funds," the governor said in a statement.
The money would finance the programs for the first half of 1987, but the process of appropriating it will probably revive the fight over the use of the public employee retirement funds.
Deukmejian has jealously guarded the state's $1-billion surplus against encroachment and adamantly refuses to dip into it for anything but unforeseen emergencies such as fire and floods.
He said that because the Legislature failed to finance the programs with the retirement funds, "I am obligated to make these reductions in order to protect California's fiscal integrity."
Under heavy pressure from schools and local governments, the Legislature earlier this month scrounged around, raided a few cookie jars and sent Deukmejian legislation aimed at restoring about $264 million of the $283 million he vetoed from the budget.
One bill, by Assemblyman Richard Robinson (D-Garden Grove), was intended to restore $67.6 million for programs for the in-home disabled; welfare services, such as emergency shelter for homeless children, and county-administered medical aid for the working poor. Deukmejian reduced the sum to $33.8 million.
Orange County health officials, who feared massive withdrawals by doctors and hospitals that participate in the county health care program for the working poor, were cautiously optimistic after the governor's action Friday.
"We would have hoped that they would have restored all of it," said Ron DiLuigi, assistant Orange County health director. "But everything we have heard from the Legislature and the governor is that they intend to fund all of it."
DiLuigi said county officials would continue operating the program as though full funding will eventually be restored.
Deukmejian also cut from $106.7 million to $53.3 million a bill by Sen. Barry Keene (D-Benicia) for transportation costs of small school districts; special financial help to urban school districts with high concentrations of low-income, bilingual and minority students, and cost-of-living adjustments for education.
Orange County lawmakers supported Keene's bill, although they failed in attempts to rewrite the formula for doling out funds under the so-called "urban impact aid" program for school districts with high concentrations of poor and bilingual students. Orange County legislators say school systems in Garden Grove and Santa Ana are being cheated because funding is based on statistics that have not been updated since the 9-year-old program began.
As part of the program restoration package, the Democratic-dominated Legislature also approved a $56.2-million bill for community colleges. Deukmejian has not yet acted on that measure.
Deukmejian has charged that Democrats, chiefly in the Senate, reneged on a deal reached last summer when the Legislature approved the state budget. He maintains that Democratic leaders agreed to approve a separate bill that would finance about $300 million in extra spending with surplus employee pension funds.
However, public employee unions complained and exerted pressure on Senate Democrats to find other means to balance the budget. Democrats stood fast and Deukmejian vetoed $283 million from the spending program with the promise to restore the sum if the lawmakers found acceptable alternative sources of revenue.