Higher Quake Relief Tax Asked : Legislature: Local officials say far more than a quarter-cent increase is needed. The governor contends that, along with reserve funds, it will be enough.

The Legislature convened in special session Thursday to act on an earthquake relief package and was immediately confronted with requests from local officials to raise the sales tax more than the quarter-cent being proposed by Gov. George Deukmejian and key lawmakers.

The local officials got no encouragement from either Deukmejian or legislative leaders.

City and county officials said non-highway damage alone in Northern California communities hit by the Oct. 17 earthquake will total $6 billion, about $1 billion more than estimates by the state Office of Emergency Services.

The proposed quarter-cent tax increase in the 6-cents-per-dollar state sales tax would be in effect for 13 months beginning Dec. 1. It would raise an estimated $800 million. Deukmejian contends that the quarter-cent increase, along with hundreds of millions more from reserves, will be enough to finance the state’s share of earthquake costs. President Bush has signed a $3.45-billion disaster relief bill, most of which will come to California.

But local officials, with support from some lawmakers, claimed that far more money will be needed to put the San Francisco Bay Area and the Santa Cruz-Hollister regions back on their feet.

“The answer to the question is not a quarter-cent sales tax increase for 13 months,” Santa Cruz County Supervisor Fred Keeley told members of the Assembly, who met as a committee of the whole. “If you agree to that, you are agreeing to sentencing them (earthquake victims) to a continuing disaster. We are proposing a one-cent sales tax increase. And it is penny-wise and pound-foolish not to do that.”

Earlier, Alameda County Supervisor Don Perata told reporters that earthquake damage in his county alone will total $2 billion. “We are going to need a whole lot more than $800 million,” he said.

Keeley, Perata and other city and county officials spent the day in an intense lobbying effort to get more financial aid for earthquake-stricken areas. They want a total of $2.7 billion in state aid alone, not counting federal disaster relief.

In a written statement to the Legislature, Deukmejian conceded that the tax increase itself would not be enough to finance all the repairs and financial aid that will be needed. He said extra costs will be “almost certainly incurred as damage reports are updated and completed.” He explained that other money for earthquake relief will come from the state’s budget reserve. The nonpartisan Commission on State Finance has said that the reserve now contains $674 million.

The Republican governor was in Los Angeles to attend a black-tie arts awards ceremony Thursday night. He is expected back in Sacramento at noon today.

Deukmejian Chief of Staff Michael R. Frost told a delegation of local officials Thursday that a quarter-cent sales tax increase would be sufficient. Frost said anything more would put the state over the restrictive spending limit approved by voters in 1979 and run into other political problems.

His assessment was backed up by both Democratic and Republican legislators.

Political Opposition

Assembly Speaker Willie Brown (D-San Francisco) said those who have asked for more money have yet to prove it is needed. “The governor has done his homework. He has come forward with a figure. He has matched that figure with a revenue-raising figure. The speculators ought to produce or shut up,” Brown said.

Senate President Pro Tem David A. Roberti (D-Los Angeles) said one of the considerations in proposing the relatively modest quarter-cent increase was that it would not be large enough to endanger the proposed gasoline tax increase that voters will be asked to approve next June to finance a 10-year, $18.5-billion transportation program.

“I don’t think we should do anything to jeopardize its passage,” Roberti told members of the Senate at the start of the special session.

Assemblyman William P. Baker (R-Danville), the GOP vice chairman of the Assembly Ways and Means Committee, said he was not convinced that even a modest sales tax increase is needed.

“We want to do all that needs to be done,” he said, “but we don’t know how much money is necessary.”

Finance Director Jesse R. Huff told the Assembly that he expects the state responsibility for matching federal assistance to come to about $855 million. Tax relief associated with the quake should total another $150 million at least, he said.

Assemblywoman Jackie Speier (D-South San Francisco) accused the Administration of planning to shift funds from health and social service programs to earthquake relief even as it was saying that the sales tax increase will be sufficient to cover the damages.

Speier released a Health Services Department internal memo that listed about $20 million in programs that she said were being put on hold by Administration officials. The programs ranged from AIDS prevention and prenatal care to pesticide regulation.

“I don’t think we want to hold the rest of the budget hostage to deal with the earthquake,” she said.

Huff conceded that he favors delaying expansion of some social programs and redirecting the money toward earthquake relief. But he emphasized that the Administration is still debating the question. “No decisions are final until the governor makes them final,” he said.

Several Assembly Democrats complained that the quarter-cent tax increase is too low. Assemblyman John Vasconcellos (D-Santa Clara), chairman of the Ways and Means Committee, described the governor’s plan as “cheap and chicken.”

In the Senate, Sen. Nicholas Petris (D-Oakland) said the quarter-cent increase “is far too low. We ought to at least go to half a cent.”

But even as some Democrats were pushing for more funds, Assemblyman Tom McClintock (R-Thousand Oaks) proposed that the state freeze increases in spending for the first 12 weeks of the next fiscal year, which begins July 1. He said this move would produce a saving of $800 million, equivalent to the amount that would be collected by the proposed sales tax increase.

On top of the proposed tax increase, Deukmejian is asking the Legislature to approve a package of 11 bills.

The governor is asking for both the money and legal authority to finance the state’s share of repairs to highways, roads, bridges and buildings. He also wants legislation that will make nonprofit agencies and higher education facilities eligible for state matching funds.

Another proposal is for the state to “ease the financial burden facing local government” by picking up their costs of repairing roads, highways and public buildings.

Included in the package are proposals for low-interest loans for homeowners who suffered damage in the quake and a plan to provide temporary housing to displaced renters and homeowners.

Also on the table is a proposal to provide cash grants of up to $10,000 each “to those disaster victims in the greatest need,” and a request for the legal authority necessary to put highway and freeway repair work on the “fast track” by exempting contractors from certain government permit requirements.

Additionally, Deukmejian said he wants the Legislature to approve a special damage compensation fund for victims of the earthquake who were killed or injured in the collapse of a stretch of the Nimitz Freeway in Oakland.

Lawmakers also came up with many of their own proposals.

About three dozen earthquake-related bills were introduced in the Senate alone. Many of the bills would add to the financial aid package proposed by the governor. One of the bills, drafted by Roberti, would make it a felony to do earthquake repair jobs while acting as an unlicensed contractor, architect or structural engineer.

The special session is expected to last until Saturday. Two years ago, the Legislature met in similar extraordinary session, also in November, to approve a $91-million package of benefits to aid victims of the Southern California earthquake. Many of the bills are redrafted versions of the legislation passed two years ago.

BACKGROUND

When California lawmakers left the Capitol in September, they did not anticipate returning until January, when the legislative session was scheduled to resume. However, Gov. George Deukmejian called the legislators back to Sacramento this week to find ways to pay for destruction left by the Oct. 17 earthquake that shook Northern California.

Times staff writers Carl Ingram and Jerry Gillam contributed to this story.

NIMITZ STUDY--A seismic study checked roadbeds, not columns, of Nimitz. A3

POOR STILL HOMELESS--More than 2,000 poor remain homeless after quake. A3