Rebate Issue Stalls Budget in Assembly

SACRAMENTO — A $41.2-billion budget bill stalled today in the state Assembly as Republicans demanded that the Legislature first approve a $700-million tax rebate sought by Gov. George Deukmejian.

The first vote on the spending plan for the fiscal year that starts July 1 was 40 to 35, far short of the 54-vote, two-thirds majority needed for approval.

Democratic leaders held the roll open in hopes of breaking the deadlock later in the day. But Assembly Minority Leader Pat Nolan (R-Glendale) said Republicans will not back the budget unless there is action on a rebate bill.

“Republicans will not vote for an incomplete budget that does not contain a rebate,” Nolan said.

Assembly Speaker Willie Brown (D-San Francisco) was sharply critical of the GOP position. “To suggest this document ought to be held hostage for somebody’s political advantage, for something called a rebate, is ludicrous,” he said.

No Deadline Penalty

Today is the constitutional deadline for the Legislature to approve a new state budget, but there is no penalty for lawmakers if they miss the deadline.

The Senate was scheduled to vote on the budget bill later today.

The deadlock over the rebate was expected, since Republicans announced they would not back the budget without getting approval of the rebate.

Deukmejian announced last month that the state was $1.1 billion over the spending limit imposed by voters in 1979. He suggested that the state deal with that problem by assuming $400 million of unused school district spending capacity and returning $700 million to taxpayers through an income tax rebate.

But Democrats and state schools chief Bill Honig criticized the proposal, saying that the rebate would give taxpayers relatively little money and leave schools with unmet needs.