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How Much From Special Interests?

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The Oakland Tribune
Jul 25, 2004 - 01:00 AM

by Steve Geissinger - SACRAMENTO BUREAU

No end is in sight for state budget

SACRAMENTO -- A $103 billion budget for a state with the world's fifth largest economy is nearly a month overdue -- because of a standoff over an explosive issue such as tax hikes?

No.

And this impasse, which some analysts are calling an odd, almost surreal turn of events, is starting to have significant political implications and real-world impacts on community colleges and others.

The new Republican governor and GOP lawmakers are battling majority Democrats over obscure partisan matters and are accusing each other of serving "special interests."

But experts say the term "special interest" is being selectively applied more than ever this year as a negative label for a monied stakeholder and campaign contributor. In other words, one side's special interest is the other side's just cause.

Meanwhile, scores of relatively poor special interests have been literally jumping up and down in fruitless protests, trying to be heard about painful cuts in the deficit-plagued spending plan. The budget relies on funding cuts and loans rather than the tax hikes opposed by Gov. Arnold Schwarzenegger and GOP legislators.

While lawmakers are debating a substantive issue -- the level of local government funding -- other hitches causing the deadlock include a law that allowed schools to contract with private bus firms to save money and another that bolstered Californians' ability to sue their bosses.

"I don't think this is the kind of issue that should hold up the budget," said lawyer Alan Harris, regarding the sue-your-boss issue.

Harris is one of the labor attorneys who have together filed about five dozen lawsuits to enforce labor codes under a law signed by former Democratic Gov. Gray Davis in his final days before being ousted in a recall election.

The union-sponsored law has irked new Republican Gov. Arnold Schwarzenegger, his fellow GOP lawmakers and business groups. Republicans are withholding support of the budget unless the so-called "sue your boss" law is repealed.

"This is absolutely the classic frivolous joke lawsuit mill and it is exactly the kind of lawsuits we have to stop," said Assemblyman John Campbell, R-Irvine, the Capitol's leading critic of the law. "It's costing us jobs and costing us tax revenue."

But Democrats and labor lawyers said the law lets workers hold employers accountable for rules the state doesn't have the manpower to enforce. And with three-quarters of any fines going to the state, it helps the ailing treasury.

"It ain't going to be repealed, case closed," said Senate leader John Burton, D-San Francisco.

The other relatively minor, union-backed law -- one signed by Davis before his recall -- makes it nearly impossible for school districts and community colleges to contract with private firms for non-instructional services such as transportation.

But, again, Schwarzenegger and GOP lawmakers want to repeal the law, opposed by business groups.

Both laws were among many bills backed by unions and lawyers that the Democrat-dominated Legislature pushed through to a Democratic governor the past two years.

Now with the governor's office in GOP hands, analysts said, Republicans are trying to reverse losses.

Late budgets are common because passage requires a two-thirds vote, which means a bi-partisan plan must be forged. But the quirky battles this year have grown more intense with each passing week.

Schwarzenegger is attacking Democrats as catering to special interests and holding up the budget.

At the same time, unions have launched radio ads in certain districts accusing Republicans -- including Assemblyman Guy Houston of Livermore -- of pandering to special interests and holding up the spending plan over the school contracting issue.

And Schwarzenegger critics, such as the Foundation for Taxpayer and Consumer Rights, say the governor is raising funds at a swift pace from business groups after pledging to sweep special interests' influence from the Capitol.

Politics aside, the delay in adoption of a budget for the 2004-05 fiscal year that began July 1 is beginning to have some real effects on California.

With the state budget impasse now in its fourth week, community colleges will start to feel the pinch on Wednesday. State Controller Steve Westley will withhold payments totalling $213 million.

Most community colleges say they can get by for now without the payments, but will be hard-pressed if the budget is delayed through mid-to-late August.

Colleges are expected to start making plans to delay payments to vendors and borrow millions of dollars if the impasse lasts.
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Staff Writer Harrison Sheppard and wire services contributed to this report.

Contact Sacramento Bureau Chief Steve Geissinger at sgeissinger@angnewspapers.com




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