SACRAMENTO — A two-house conference committee reached agreement on a nearly $50-billion proposed state budget Monday after approving an extra $100 million from Proposition 99 tobacco tax money for trauma centers and emergency medical services.
The agreement on extra money for trauma centers and emergency services, pushed by Los Angeles legislators, came just hours before the conference committee voted 6 to 0 on the nearly $50-billion budget for the 1989-90 fiscal year that will begin July 1. The budget now will go back to the Assembly and Senate for final votes by the two houses.
Typically, the conference committee spending recommendations are adopted by both houses and forwarded on to the governor as the Legislature's official budget. This year, however, conference committee agreement is only one element of the complicated budget puzzle.
Gov. George Deukmejian and legislative leaders are still negotiating on several major issues that must be resolved to pave the way for adoption of a budget.
The issues are:
- How to modify the voter-approved limit on government spending, so that the state will be free to spend a $2.5-billion tax windfall.
- How to distribute $1.5 billion in new money for public schools and community colleges that has been reserved for education under terms of Proposition 98, which was passed by voters last year.
Earlier, the governor and legislative leaders reached tentative agreement on a 10-year, $18.5-billion transportation plan, but that proposal will not be submitted to the Legislature for approval until all issues under negotiation have been resolved.
If the spending limit is not changed, Deukmejian or the Legislature will have to cut at least $900 million from the committee-approved budget because the state would lack legal authority to spend the money.
Even though key roadblocks remain, Monday's agreement by the six-member conference committee on the trauma-care funding proposal will help pave the way for budget passage. Two Los Angeles Democratic legislators on the committee--Assemblywoman Maxine Waters and Sen. Alan Robbins--led the fight for the extra money for the state's financially troubled trauma-center and emergency-care network.
It comes from a pot of $545 million that will be distributed to a variety of medical, research and education programs as a result of voter approval last year of Proposition 99, which raised the tax on cigarettes by 25-cents a pack and made comparable increases in taxes on other tobacco products.
The exact formula for dividing up the tobacco tax money will be worked out in separate legislation.
However, under an amendment worked out by Waters, if the separate legislation is not approved by Oct. 1, then the money automatically will be divided up by California's counties. Los Angeles County, because of its size and extensive trauma-care network, is expected to reap a significant windfall either way. The closing of trauma centers in the Los Angeles area because of budget difficulties has been one of the county's more pressing public health problems.
"We've been suffering in Los Angeles because of the closing down of trauma-care centers. We felt we needed to take a little extra step here so we could expand the level of care for trauma and ensure that people who are in accidents are taken care of," Waters said.
Waters' success may be short-lived. Rumors circulating around the conference committee were that Deukmejian may veto the money from the budget because of opposition from within the Administration to the use of tobacco tax money to support trauma centers.
Moments before the main budget was approved, the conference committee struggled to come up with $110 million in proposed reductions in order to boost the reserve for fiscal emergencies to about $870 million, a figure well below the target set by the governor.
Deukmejian, reasoning that this year's reserve was whittled down to nearly zero by unexpected demands for state money that developed during the year, has told the budget writers that he wants a reserve of $1.2 billion, in addition to a separate reserve for education programs of $250 million.
Programs cut by the committee included a reduction of $30 million in Medi-Cal expenditures to hospitals, $50 million in extra funds for health programs for the working poor, $5 million from a pilot health program for children, $8 million to hire additional Workers' Compensation Court judges and $17 million in tax relief given to farmers who agree not to sell agricultural land to commercial and residential developers.
Several major spending priorities were set even before the conference committee began its deliberations.
For instance, pay raises for state employees, a potentially divisive matter, was not an issue this year because lawmakers agreed last year on a two-year pay package. State employees got a 6% pay raise June 1 and will receive another 4% raise Jan. 1.
In addition, both houses of the Legislature had agreed before the conference committee was convened that welfare recipients would receive 4.6% increases in their monthly allowances.
Deukmejian also defused much of the tension building up over this year's budget when he announced June 1 that he was agreeing to substantial increases in budgets for mental health, youth camps, health services for the poor and nursing programs for the elderly.
His announcement was based on the assumption that he and legislative leaders will be able to agree on legislation that will allow them to spend the $2.5-billion windfall, which resulted from unexpectedly high personal income tax collections. In January, when the budget picture looked much bleaker, Deukmejian had proposed deep cuts in the same programs.
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