Panel Backs Deukmejian on Budget Accounting Rules

SACRAMENTO —  Hopes by Gov. George Deukmejian that the Commission on State Finance would put to rest the “accountants’ debate” over the existence of a deficit in last year’s budget ended Monday in a flurry of political sniping between Democratic and Republican lawmakers.

In between the political barbs, the commission voted 4 to 1 on a balanced budget resolution, saying in effect that the state budget has a “surplus” when revenues exceed expenditures in any given year.

The commission also recommended to the Legislature that for purposes of budget decisions, expenditures should not be counted until goods or services are actually delivered to the state.

Basically, the resolution supports Deukmejian’s argument that the state ended the 1987-88 fiscal year in the black. Deukmejian’s budget assessment was based on money raised and spent during the year, not on outstanding bills.

But the resolution did nothing to settle the large political fight that began months ago when state Controller Gray Davis and others charged that the Republican governor was hiding a deficit by resorting to accounting gimmicks.

The governor’s critics noted that the state had spent much more money during the 1987-88 fiscal year than it had raised in tax revenues. The state got away with it because some of the goods it ordered were not actually delivered until the following budget year, the critics said.

The four members of the commission who voted in favor of the resolution backing up the governor’s position were Republicans. The only “no” vote was cast by Controller Davis, a Democrat.

Seeing the handwriting on the wall before the vote, Davis fumed, “This is just a game. We are not doing anything serious or substantive.”

Davis said the resolution “is clearly an attempt to save face by Gov. Deukmejian.”

“We can get four votes that it will rain beer. That doesn’t mean it will rain beer,” Davis said.

Assemblyman William P. Baker (R-Danville) in turn scolded Davis. “I’d be very happy not to ever have accounting principles if you’d stop issuing press releases saying we’re going broke,” Baker said.

After the meeting, Sen. Ken Maddy (R-Fresno) was asked what he thought had been accomplished by the resolution and the hours of debate that had preceded it.

“Nothing . . . zero,” Maddy said.

Another member of the commission, Assemblyman John Vasconcellos (D-San Jose), chairman of the Assembly Ways and Means Committee, who did not vote on the resolution, said the Republicans seemed to “have found a way of making it look like we have more money”--at least until 1990, when Deukmejian has announced that he will leave office. Then, Vasconcellos said, “the next governor will have to pick up the pieces.”

The composition of the seven-member commission is prescribed by state law. It consists of the state treasurer, controller, finance director, two state senators and two assemblymen. GOP members gained a majority this year, when Republican Thomas W. Hayes was appointed to replace the late Jesse M. Unruh, a Democrat, as treasurer.