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Calif. Controller To Disburse Funds Governor Impounded

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State Controller Gray Davis of California last week defied Gov. George Deukmejian and announced that he would begin sending school districts funds the Governor had impounded from the education budget.

Mr. Davis said that, at the request of the state education department, he would pay the public schools the full amount they had been slated to receive in August before Mr. Deukmejian set aside funding from the department's budget.

The controller, a Democrat whose elected office is constitutionally separate from the governor's, said his actions, projected over a year, would provide schools with $462 million that the Republican Governor had impounded from the education budget.

"Our schools can't afford to wait on Sacramento," Mr. Davis said. ''Paying the full amount will give schools the money they were expecting. At the same time, I urge the legislature and the Governor to negotiate in good faith to resolve this dispute."

Governor Deukmejian responded by accusing Mr. Davis of "shameless media showboating" and issuing a letter to district superintendents urging them to plan their budgets without the set-aside funds, which they will stop receiving by February at the latest.

In a letter to Superintendent of Public Instruction Bill Honig, Mr. Davis said that he had made the full August funding payment "to avoid the disruption of local district planning and operations" caused by the set-asides. Mr. Davis also argued that the Governor's action in withholding funds may have violated Proposition 98, a state constitutional amendment mandating minimum levels of spending for education.

The Senate, meanwhile, late last week was debating two Assembly-passed bills that would restore a total of $367 million for education.

The first measure, passed by the Assembly on a 42-to-19 vote, restored $10 million budgeted for the California Assessment Program, which the Governor had vetoed outright as not protected by Proposition 98.

The second bill, passed by a 42-to-9 vote of the Assembly, restored $355 million in impounded funds that had been earmarked for a 4.8 percent cost-of-living increase for school salaries and operating expenses. In impounde funds, Mr. Deukmejian had instead allocated a cost-of-living increase of 3 percent.

Both measures required only a simple majority to pass, compared with the two-thirds' majority needed to override a veto. Even so, they appeared to have little chance of being approved by the Senate before the legislature's scheduled adjournment last Friday, and were regarded byegislators as likely to be vetoed by the Governor if passed.

Efforts to move legislation containing the Governor's own plan for spending the impounded funds also died late last week in the Senate.

Responding to criticism of his budget actions, Mr. Deukmejian proposed Aug. 23 to spend $189 million from the impounded funds for class-size reduction. Voters had approved Proposition 98 in 1988 with the intention of reducing class sizes, he argued, adding that frustration over the state's failure to do so was a leading factor motivating him to impound $558.5 million in Proposition 98 funds from the state's $55.7-billion budget.

Earlier, Mr. Honig and eight education groups had alleged that Mr. Deukmejian's impoundment of funds was a "punitive, petty, and unconstitutional" effort to retaliate against educators, who helped this summer to defeat his attempt to suspend Proposition 98 and cut proposed increases in education spending by $800 million.

If Mr. Deukmejian and the legislature fail to reach an agreement on education spending, the education community may have to wait until a new governor takes office in January to seek a restoration of education funds, said L. Susan Lange, a spokesman for the education department.

Ms. Lange said that both the Democratic gubernatorial candidate, former San Francisco Mayor Dianne Feinstein, and the GOP contender, U.S. Senator Pete Wilson, are far more supportive of education spending than Governor Deukmejian has been. "We stand to get a better deal from them," she said.

Nevertheless, some Republican legislators characterized the fund-restoring bills before them as a Democratic effort to keep the dispute alive as a campaign issue.

Mr. Wilson has declined to comment on the current debate. But Ms. Feinstein, in an address last month to the California School Employees Association, said Mr. Deukmejian's impoundment of education funds was "mean-spirited and intended to be punitive," and vowed to restore the funds if elected.

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