GRAY DAVIS HITS A WALL OVER FUNDING NEW PRISON

Gray Davis Hits a Wall Over Funding New Prison Democrats balk at $335
million project in budget Greg Lucas, Chronicle Sacramento Bureau

In their first major clash, Democratic Governor Gray Davis and the
more liberal legislative leaders of his own party are in a high-stakes
battle over construction of a new, $335 million state prison.

The governor wants it. The Legislature's powerhouses
don't.

The fight over the prison imperils Davis' goal of swift legislative
approval for his $79.3 billion spending plan for the new fiscal year,
which begins July 1.

So important is the 4,600-bed prison to Davis that he asked at least
one major campaign contributor to lobby Assembly Speaker Antonio
Villaraigosa, D-Los Angeles, who opposes spending more than $20
million on the project this year.

Senate President Pro Tem John Burton, D-San Francisco, is even less
enthused. ``There's never been any justification for it,'' he said
yesterday. ``Let's look at alternatives to crowded prisons before
spending that kind of cash on a new one.''

A Davis spokesman said lawmakers who do not back the prison are making
``a mistake.''

Davis has staked his prestige on an on-time budget. Burton said Monday
the Legislature will not meet the legal deadline of next Tuesday for
completing its work on the spending plan, but it could still be
finished and signed by Davis before the start of the new fiscal year.

Although lawmakers and Davis have other differences in priorities, the
prison is by far the biggest stumbling block to reaching a budget accord.

Burton, Villaraigosa and their Democratic allies want Davis to spend
more money on health care programs for the poor and increased wages
for caregivers who provide in-home help to the elderly or disabled.

The budget plan, being worked out by a special six-member committee of
senators and Assembly members, cut money for Davis' prison and used
the savings to increase health care spending.

Davis earmarked $110 million to be split between increasing access to
health care for the poor, increasing staff and wages in nursing homes,
increasing pay for in-home caregivers and increasing money paid to
doctors and others who provide care under Medi-Cal, the California
health program for the poor.

Senate budget writers added more than $100 million to Davis' $110
million. The Assembly increased spending in those areas by $200 million.

Davis has said privately he opposes spending that much money on those
programs.

Budgeting the full $335 million for the prison is just one of the ways
that Davis demonstrated a cautious approach in his spending plan.

The governor also wants to maintain a $1 billion reserve account for
emergencies, a $300 million pot for state worker raises and litigation
costs and another $250 million for a tax cut that will not even occur
until next year.

Legislative budget writers say there is no reason to set aside the
full price tag for the prison now when the money could be spread out
over the three years it will take to complete the project.

"It seemed to be more of a rainy day account. That's one reason we
didn't put all the money in the budget," said Assemblywoman Denise
Ducheny, D-San Diego, co-chair of the budget-writing committee.

Instead, the committee proposed spending at least $25 million to
increase drug rehabilitation programs in prisons and help parolees
find work.

"We need to do something about recidivism instead of just building and
building more prisons," Burton said. "It's easier to get in to see
Willie Brown on one of his open house days on Saturdays where you draw
lots than it is to get into a drug treatment program in prison."

Michael Bustamante, Davis' press secretary, said the prison is needed
because California's 33 operating prisons are overcrowded.

"We have 160,000 prisoners. We're at 195 percent of capacity. The most
conservative estimate is we'll have 40,000 new prisoners over the next
10 years," Bustamante said. "We have an immediate real need now to
build at least one new prison."

Davis' insistence on the new prison also rankles Democrats who endured
16 years of Republican governors whose focus was building more prisons
at the expense of prevention and rehabilitation efforts.

So far, Davis has shown no sign of reversing that focus.

Bustamante said the governor had no position on the Legislature's
increased spending on parolees and drug rehabilitation.

But Tipton Kendall, a spokesman for the state Department of
Corrections, said the Legislature is increasing funds for "programs
that have proven successful enough to warrant expansion."

To champion his prison, Davis enlisted the aid of Stanley Zax, CEO of
Zenith Insurance Co. Last year, Zax's company contributed $100,000 to
Davis' election. Zenith gave Burton $100,000; Villaraigosa $50,000;
and $100,500 to other Democratic legislative candidates.

Zax is also a member of the Milton Marks Commission on California
State Government Organization and Economy, which studies everything
from foster care to prisons, and recommends ways to improve efficiency.

Zax said he called Davis to compliment the governor on his prison
construction idea and discuss other issues, such as foster care.

"`I told him I thought that was a great idea to build (the prison) out
of the cash flow,'' Zax said in an interview. ``He said, `One of these
days when you're talking to Antonio (Villaraigosa), do me a favor and
mention it.' I did mention it."

Zax said he also backed the proposals Democratic lawmakers have made
to slow recidivism and the number of people entering prison in the
first place.