BUDGET: Assembly Passes Spending Bill with Health Care Tax Cut

      "After a largely futile 24-hour delay" in joining the Senate in approving the state budget, Assembly Republicans "finally gave up and voted for it" after Gov. Gray Davis agreed to three relatively minor tax cuts, including a health care tax deduction for the self-employed. The 69-10 vote saw 21 Republicans join all 47 Democrats and the lone Green Party member. One Republican abstained (Morain, Los Angeles Times, 6/17). Davis said, "Today, the Legislature voted to send the first state budget of the 21st century to my desk. It is an historic achievement. It is the earliest that the Legislature has passed a budget since 1986. It gives me ample opportunity to honor my pledge to sign the first on-time budget since 1993" (release, 6/16). But some Republicans were not nearly as pleased. Assemblyman Tom McClintock (R-Simi Valley) said, "This is the same budget that was on the floor last night. I wonder what has changed" (Mendel, San Diego Union-Tribune, 6/17). But Assembly GOP leader Scott Baugh (R-Huntington Beach) said, "I came to the conclusion that a long protracted budget battle would do more harm than good" (Willis, AP/Sacramento Bee, 6/17). He added, "This is not a perfect budget, but it's a product of compromise" (Weintraub, Orange County Register, 6/17). The largest of the new tax cuts "conforms California to federal health care deductions for the self-employed" -- a provision that will cost $21 million next year and $83 million in five years. Another will increase the tax credit for corporate research and development, to the tune of $15 million next year and $25 million in five years (Union-Tribune, 6/17). The $81.7 billion budget would provide $248 million over two years for a Medi-Cal expansion for working adults and raise Medi-Cal reimbursements for doctors and hospitals and nursing homes by 10% (CHL, 6/16). While Davis is expected to sign the bill by July, legislative leaders "expect him to [line-item] veto as much as $300 million in specific spending, much of it in health care" (Smith/Capps, Sacramento Bee, 6/17).