Times Staff Writer

In a stunning surprise for the state's arts community, Gov. George Deukmejian stuck to his original budget blueprint and gave the California Arts Council just the $11,692,000 that he had initially planned for fiscal 1985-86. With additional federal funding, the state arts agency's budget is expected to reach about $12.6 million for the new fiscal year beginning today.

Many observers, including some of the governor's own Republican appointees to the council, expected some sort of augmentation in light of the state's billion-dollar surplus. Moreover, last year the governor seemed to have set a precedent of compromise by splitting the difference between his own lower recommendation and the Democratic-controlled Legislature's higher amount to arrive at the 1984-85 arts budget figure.

Instead, Deukmejian took a hard-line position with the arts budget that found the council's GOP members rallying behind him for the most part, while Democratic appointees generally expressed chagrin. Ironically, the new budget also appeared to put him in some conflict with the National Endowment for the Arts, which has criticized various aspects of the state's arts program.

Although the $12.6-million figure represents an amount slightly more than that ever budgeted to the state agency, Sen. Henry Mello (D-Watsonville), chairman of the Joint Legislative Committee on the Arts, noted that, "It is clear we have not kept pace with inflation." He pointed out that four budgets ago, during the administration of Gov. Edmund G. (Jerry) Brown Jr., the arts budget was $12.4 million, just $200,000 under the Deukmejian budget.

"It's sad that the governor did not see fit to augment the budget for such worthy programs as the minority arts program or independent artists," Mello added. "The $12.6 million is a far cry from the $44 million that the New York State Council (on the Arts) will get in '85-'86. It is especially distressing considering that California has more artists than any other state."

In his budget message, the governor blue-penciled a $500,000 program to support individual artists. (The state's treatment of individual artists came under criticism recently from the National Endowment for the Arts in reaction to California's revised grant application.) Meanwhile, sources close to the joint arts committee do not expect any attempt at a veto override. Looking to the future, Mello said, "We'll just have to try to convince the governor that the richest state in the union can afford to spend $1 per person for the arts--rather than the 30 cents we currently spend."

Michael Newton, president of the Music Center's Performing Arts Council, expressed similar reactions. While noting he was "glad and grateful" for the "decent" increase in the arts budget--from $10.4 million in state money alone in fiscal '84-'85 to $11.692 million for '85-'86--Newton added, "We've got to work harder next year."

"The one thing I'm sorry about," he added, "is that we are slipping further behind New York. . . . We have aspirations to be as significant in the arts as New York State, and it's very difficult if the public sector doesn't do its part. . . . That public money is a spur to private giving. It's a mistake to think it's one or the other. It's both."

June Gutfleisch, executive director of the California Confederation of the Arts, a statewide advocacy organization, blamed both the 11-member council as well as the agency, whose top staff are Deukmejian appointees, for "failure to make the case to the governor that more money was needed.

"There has been widespread criticism of the executive director (Marilyn Ryan) from the field and the council," Gutfleisch added. "In wrangling over each other's competency by staff and council, the baby got thrown out with the bath."

While two GOP arts council members voted in favor of a higher budget at the last council meeting in San Francisco, there was some shifting in the wake of the governor's action. The Legislature had recommended $4 million more than the governor.

"There was no question in my mind that additional monies could be well spent in California," said Deukmejian appointee Harvey Stearn, an executive with the Mission Viejo Co. and vice chairman of the arts council. "There was also no way of knowing what the competitive priorities (in the state) were. He (Deukmejian) made that determination, and I support it."

Brown appointee Stephen Goldstine, president of the San Francisco Art Institute and chairman of the council, called the new budget "a serious reduction," adding, "I'm sorry the governor didn't appreciate the extent to which the state arts could benefit from that augmentation. I'm rather surprised because this was a year in which revenues were in a strong position."

Citing the governor's campaign to bring more tourists to California, Goldstine pointed out that besides the state's natural physical beauty, the arts play a key role in attracting visitors to the state.

California's standing with the National Endowment for the Arts complicates matters. After initially rejecting the state art's council's application for its basic state grant in February, a national endowment advisory panel recommended approval May 29. Final approval of the application, which will bring nearly $900,000 of federal funds into state arts programs, is scheduled for August at a meeting of the National Council on the Arts.

However, in a June 14 letter to council director Marilyn Ryan obtained by The Times, Anthony B. Turney, deputy chairman for public partnership and director of state programs, wrote that the initial approval was done "with an expression of reluctance."

"Little relationship could be found between identified needs of the arts in California and the council's state objectives; for example, the application notes the high number of individual artists in the state but says little about how the council proposes to serve them."

At another point Turney wrote: "Panelists noted with some concern that out of a $10 million budget (state money only for fiscal '84-'85), the council provided only $100,000 for minority arts programs." In the new budget, minority programs will receive $164,000.

The letter also stated that California's "application was regarded as colorless, with no sense of energy; it did not reflect the vitality of the arts in California."

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