Assembly leader Perez drums up support for budget proposal; questions about its legality are raised

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Assembly Speaker John Perez (D-Los Angeles) on Friday stood with members of the education community in Los Angeles to support his budget proposal one day after the state attorney general’s office raised questions about its legality.

Perez has devised a plan -- it involves a new tax on oil extraction coupled with borrowing billions of dollars -- that would bypass the need to make many of the deep cuts proposed by Gov. Arnold Schwarzenegger. He has dubbed his plan the ‘California Jobs Budget,’ and has held news conferences with various interest groups in the Capitol extolling the proposal.

Perez’s budget offers public schools $5 billion more than the governor’s proposal.

‘Our long-term growth directly depends on having an exceptionally well-educated work force,’ Perez said. ‘More than 35,000 education jobs are threatened by layoffs right now -- including 26,000 teachers. The California Jobs Budget protects those jobs by fully funding education and repaying local school districts.’

In a letter released Thursday, Constance LeLouis, a deputy in the state attorney general’s office, wrote that the Democrats’ plan, which calls for borrowing $9 billion from the state’s bottle deposits fund to be repaid with a new tax on oil extraction, ‘could be suspect’ in court.

Specifically, Schwarzenegger asked the attorney general if he could provide ‘unqualified approving opinion’ of the plan. LeLouis said the office could not, taking a ‘conservative approach.’

‘We conclude that a court could reasonably determine that the proposed transaction violates Proposition 58,’ she wrote.

-- Anthony York in Sacramento