Panel OKs AIDS Donation Tax Write-Off

SACRAMENTO — A Democratic-dominated Senate committee reversed itself Tuesday and approved legislation opposed by Gov. George Deukmejian that would authorize a state tax write-off for contributions to finance a cure for AIDS.

Action by the Constitutional Amendments Committee was aimed at prodding the governor to negotiate and reach a compromise with supporters of substantially increased financing for AIDS research.

The legislation would grant an income tax credit of up to 55% to businesses and individuals who contributed to a special AIDS research fund. (Tax credits, unlike deductions, are subtracted from the amount of taxes owed.) Last year, the governor vetoed a similar bill that had cleared the Legislature unanimously.

This year, to avoid another possible veto, supporters drafted the proposal as a constitutional amendment, which would not be subject to action by Deukmejian but would require a difficult-to-obtain two-thirds favorable vote by both houses. If successful, the measure would appear on the June primary ballot.

The Senate Constitutional Amendments Committee last week balked at approving the measure, contending that tax policy had no place in the state Constitution. Members urged the author, Assemblyman Johan Klehs (D-San Leandro), to try to negotiate a compromise with the governor.

Klehs returned to the committee on Tuesday and the legislation swiftly sailed out on a 3-0 Democratic vote. Sen. Alfred E. Alquist (D-San Jose), a leading opponent previously, said he changed his mind because after looking at the names of influential lawmakers who co-authored the measure, “it seemed to me there was such strong support for it that I kind of swallowed my objections.”

Asked for Vote

An aide to Senate President Pro Tem David A. Roberti (D-Los Angeles), a co-author of the measure, said Roberti talked with Alquist and asked him to vote for it.

At the same time, Klehs, attempting to capitalize on Deukmejian Administration signals last week that the governor may be willing to compromise, said he would be willing to put his proposal in regular bill form. Since Deukmejian has the power to veto bills, this would give the governor a voice in negotiating contents of the measure.

In addition, Klehs said in order to ease Administration concerns over the loss of revenue that a tax credit would cause, he would earmark an estimated $32 million to $42 million in surplus tax rebate funds to finance the program for at least its first year of operation.

Klehs said he wants to demonstrate his interest in making “progress toward a resolution the governor can support.”

Incentive Needed

However, Klehs cautioned that it is important to keep the the constitutional amendment proposal alive as an incentive for Deukmejian to negotiate a compromise.

Agreeing with Klehs, the Constitutional Amendments Committee on Tuesday voted speedy approval to his amendment measure and sent it to the Appropriations Committee for another hearing.

Supporters of more money to fight AIDS want to be able to point to a substantial achievement by the Legislature in an effort to defeat an initiative that will appear on the June ballot. Sponsored by backers of political extremist Lyndon LaRouche, the initiative, among other things, would subject people exposed to the AIDS virus to quarantine.

More Money Sought

Supporters of of the tax-credit legislation, who insist that vastly more money must be spent on research to cure and prevent AIDS, figure the Klehs measure would produce about $150 million in the first two years of operation.

Since 1983, California, which has led the nation in state funds committed to fight the epidemic, has set aside $190 million in the anti-AIDS battle. In his proposed state budget for the fiscal year starting July 1, Deukmejian has offered to increase the sum by $5.3 million to $70.2 million annually.

Taxpayer contributions would be administered by a board of legislative and gubernatorial appointees who would make grants available to both public and private researchers.