Davis’ Budget Plan Rebuked by Riordan

Gubernatorial candidate Richard Riordan criticized Gov. Gray Davis on Monday for proposing a diversion of California’s tobacco settlement money to help close the state’s budget gap--a proposal similar to one Riordan himself made as mayor of Los Angeles.

Two years ago, Riordan asked the City Council to use the city’s share of the tobacco settlement to resolve lawsuits in the Rampart police corruption scandal. The council rejected the plan.

On Monday, during a campaign stop at the Richard Nixon Library & Birthplace in Yorba Linda, a college student asked the Republican candidate what he thought of Davis’ tobacco money proposal.

“It’s a terrible mistake,” Riordan said.

California receives about $500 million a year under the nationwide settlement of tobacco litigation. On Thursday, Davis proposed borrowing $2.4 billion against future tobacco payments to help plug a $12.5-billion budget gap.

To repay the bonds with interest would cost the state $190 million a year over the next 22 years--essentially lowering the tobacco settlement payments by 40% each year.

“What he’s doing is taking a revenue stream that the state would have over 25 years, and paying it to take care of the mistakes that all happened in the year 2001,” Riordan said. “I think that this is just not the way to run finances.”

Asked about his similar proposal, Riordan responded:

“Clearly, if you want to use the money for something, use it for something positive that people can criticize you on or not criticize you on--like Rampart. But don’t use it to cover a deficit.”

Roger Salazar, a spokesman for the Democratic governor’s reelection campaign, called Riordan’s remarks “ludicrous.” He said Riordan’s proposal for the Los Angeles tobacco money would have offered the public no tangible benefits.

“That money would not have made one person safer,” Salazar said. “You weren’t going to get any more police on the streets.”

Although he was critical of the steps taken by Davis to cover the budget gap, Riordan said he would not lay out any specific budget cuts until Davis proposes his final spending plan in May. That would be two months after the March 5 Republican primary.

“As far as the kind of details as to what programs I’m going to cut ... I won’t do it until after the governor issues his real budget in May,” Riordan said. Riordan’s proposal for the use of Los Angeles’ tobacco settlement came in February 2000. In essence, it would have given the city nearly $100 million to cover the cost of Rampart lawsuits.

At the time, the city was facing its first wave of liability payments to people who had been abused by Los Angeles police officers implicated in improper shootings, framing of suspects, thefts, beatings, perjury and cover-ups.

City Council members called Riordan’s plan fiscally irresponsible and refused to approve it.

Mike Feuer, a Democrat who was then chairman of the council’s budget committee, said Riordan’s remarks Monday were “hypocritical” and “disingenuous.”

“If anybody should know that there are flaws in this approach, it’s Riordan, who--when he proposed essentially the same thing--was shot down by just about every other elected city official and key staff members in City Hall,” Feuer said.