California Assembly nears vote on budget, but obstacles remain.

LOS ANGELES - The Democrat-controlled California Assembly moved nearer yesterday to a floor vote on a budget plan for fiscal 1994, but the plan still faces likely opposition from many Republicans.

Despite the possible roadblock, both parties seemed closer to a budget agreement at this stage than they have been at comparable times in previous years. A legislative conference committee on Monday approved the framework for a spending plan in the budget year beginning July 1, based on support from the committee's four Democrats. The two Republicans on the committee abstained, however, and it was uncertain yesterday if enough Republicans in the Assembly would switch sides to give the plan the two-thirds majority needed for passage.

The conference committee's plan would pay off a deficit of almost $3 billion by extending a temporary sales tax increase for three years beyond the scheduled expiration date of June 30. Gov. Pete Wilson, a Republican, has so far only agreed to extend the tax increase for six months.

Wilson's proposed budget would make slightly deeper cuts in welfare grants than the conference committee's plan. Wilson also has proposed using $2.6 billion of local property tax revenues to fund schools, which would help the state balance its own budget. The conference committee plan proposes a revenue transfer of only about $1.2 billion.

For reprint and licensing requests for this article, click here.
MORE FROM AMERICAN BANKER