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Republican, Democrat Offer Compromise on State Budget

An analyst calls the proposal a good starting point to break the lengthy stalemate. No other lawmakers rush to embrace it.

June 18, 2003|Evan Halper | Times Staff Writer

SACRAMENTO — Two high-profile legislators -- a Republican and a Democrat -- broke party ranks Tuesday to push for a compromise state spending plan with deep cuts and new taxes in a move that they hope will stimulate stalled budget negotiations.

Party leaders seemed uncertain how to respond to the proposal from Assemblymen Keith Richman (R-Northridge) and Joe Canciamilla (D-Pittsburg). Though it violates the Republican promise to stand firm against any new taxes and Democratic vows not to cut deep into government services, the plan suggests a comprehensive solution that would require each party to give a little.

Yet no lawmakers rushed in Tuesday to sign onto the proposal -- not even the 16 other members of the bipartisan budget working group from which many of the ideas came.

"The truth is nobody wants to make the difficult choices," Canciamilla said.

Some fiscal analysts, however, embraced the proposal.

"It makes sense and it balances the budget," said Kim Rueben, a budget analyst with the nonprofit Public Policy Institute of California. "I don't think this is an end product, but I think it is a much better place to start. If people would begin to seriously consider this, we would be much further along than we currently are."

Reuben said the proposal is one of the few workable plans in play that deals with the year-to-year imbalance between what the state spends and how much it receives in revenues while detailing where all the cuts would have to be made. The nonpartisan legislative analyst also noted that the proposal would resolve the state's so-called chronic deficit.

The proposal attempts to bridge the divide between Republicans and Democrats by including a half-cent sales tax increase and a tripling of the vehicle license fee for car owners, as well as deep cuts in education and Medi-Cal.

As Richman and Canciamilla released their plan, legislative leaders and Gov. Gray Davis continued to report no progress on closing the state's $38-billion shortfall. Further evidence of how far apart they are came Tuesday morning in a letter that Senate Republican Leader Jim Brulte sent to the governor.

In the letter, Brulte questioned a claim Davis made in radio interviews that the governor and legislative leaders were close to a budget agreement before Brulte threatened the political careers of any Republicans who vote for taxes. Brulte's letter disputed the suggestion that Davis has been effective in moving budget negotiations forward.

"Your characterization of the status of overall budget negotiations leaves me perplexed," Brulte wrote. "What were the terms of the near-agreement to which you refer? Who helped craft it? Who agreed to it?"

Davis spokeswoman Hilary McLean said the governor never said any of the participants had committed to vote a particular way, but their body language and the tone of the meetings suggested progress was being made.

Brulte was not around the Capitol on Tuesday afternoon to say whether he would now target Richman for defeat. He went home sick soon after Richman and Canciamilla released their proposal.

A spokesman for Assembly Republican Leader Dave Cox of Fair Oaks said Richman is free to advocate his plan, but reiterated that there are not six Republicans in the Assembly to vote for a tax increase, the minimum number needed to meet the state Constitution's two-thirds requirement. In a statement, Cox applauded Democrat Canciamilla for understanding "that responsible spending reductions must be made."

Assembly Speaker Herb J. Wesson Jr. (D-Culver City), meanwhile, praised Richman for showing "the courage to stand up to the extremist threats from his party's leadership, do the right thing and agree to raise taxes."

Richman said he is unconcerned about Republican retribution.

" 'No new taxes' is a political orthodoxy, almost like a religious orthodoxy," Richman said. "You can't solve the long-term deficit without that half-cent sales tax being targeted specifically for deficit reduction."

Richman said that if others in his party refuse to budge on that issue -- and if more Democrats refuse to consider the kind of deeper spending cuts he and Canciamilla are advocating -- lenders on Wall Street will force the issue. The reluctance of lawmakers to deal with the budget crisis has already resulted in California having the lowest credit rating in the country, only two rating notches away from junk bond status.

The Richman-Canciamilla plan calls for cutting K-12 and higher education by a total of $1.24 billion, and health and human services -- including Medi-Cal and aid to the aged and disabled -- by $1.4 billion. Local government would take a one-time, $500-million hit. Also proposed for significant reduction is the Department of Corrections, which would be cut by $150 million.

The plan also calls for rolling back state government staffing to 1998 levels and increasing fees for state university and community college students.

The plan would place a firm cap on state government spending, limiting it to the growth rates of population and inflation.

Some interest groups have already mobilized against the proposal.

Officials from Health Access California, a nonprofit that advocates affordable medical care, warned that the proposal would result in hundreds of thousands of children losing their health insurance.

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