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California Assembly OKs Budget

August 12, 1998

SACRAMENTO, Calif. (AP) _ California has been without a budget since July 1, but lawmakers struggling with how to use a whopping surplus finally sent the governor a $76.9 billion budget with some $1.4 billion in tax cuts and more money for schools.

Welfare recipients would get a cost-of-living increase, and motorists would get a 25 percent reduction in license fees.

The final 65-13 Assembly vote Tuesday came one day after the state Senate approved the spending plan 34-4.

``We invested in children and public schools. We said to the taxpayers of California we’re willing to give tax relief to the working families of California,″ said Assembly Speaker Antonio Villaraigosa, a Los Angeles Democrat.

A spokesman for Gov. Pete Wilson said he will probably take until next week to go through the budget and the 42 related bills. The Republican governor is expected to line-item veto nearly $1 billion to provide a healthy reserve.

The plan includes tax cuts that total $1.4 billion in the coming year and could reach $3.6 billion by 2003. Most of the cuts are in the vehicle fees, which could save an average of $42.50 per vehicle now and more in future years if the economy stays good.

The package also includes an income-tax credit for renters and a variety of tax breaks for businesses.

The welfare cost-of-living increase is the first since 1989. Monthly grants for an urban family of three will increase 7.7 percent in November, from $565 to $611. The increase for aged, blind and disabled recipients will be 3.8 percent, from $650 to $676 per month, beginning next January.

The budget gives public schools more than $700 million above the minimum funding guarantees of Proposition 98.

The state Constitution requires the Legislature to pass a budget by June 15 and the fiscal year started July 1. But with the state’s $4.4 billion surplus lawmakers and the governor had trouble agreeing on how to spend the riches.

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