Governor Draws Dark Picture of Budget Cutbacks : Spending: He outlines a set of options all suggesting deep cuts. A key Senate committee responds by offering a plan with a multibillion-dollar deficit.

Republican Gov. George Deukmejian Thursday outlined to legislative leaders a set of severe budget options he said might be necessary to keep state spending in line with available revenues.

Several hours later, action by the Democrat-dominated Senate Budget and Fiscal Review Committee showed clearly that lawmakers are not in a mood to cut spending. The committee approved a whopping $56.4-billion version of the budget that is $2.6 billion more than Deukmejian’s spending plan for the fiscal year that will begin July 1.

The committee-approved budget, passed on a bipartisan 11-0 vote, was not accompanied by a revenue plan.

Budget experts say the governor and Legislature are about $3.6 billion short of what they need to finance the current level of services being provided by the state and restore the $1-billion budget reserve.

Earlier in the day, Deukmejian gave legislative leaders a sobering jolt when he outlined a set of three options that suggest deep cuts in virtually all state programs, including constitutionally protected spending on public schools.

During a private morning meeting with leaders of the Senate and Assembly, Deukmejian said that all state services would have to be cut by 7.5% to bring spending in line with available revenues. But he said a cut of that size is possible only if schools and welfare programs share in the reductions.

If schools and welfare programs are protected, which some lawmakers have been suggesting, then cuts will be even deeper for other programs.

Deukmejian told the legislative leaders that if schools and welfare are not cut, other agencies would have to share in a 16% reduction. If all programs are cut except schools, the reductions would be 12.8%, Deukmejian said.

The legislative leaders emerged from the meeting saying nothing had been decided and that they considered all options still open. A spokesman for Deukmejian said the various options were just part of the ongoing budget talks and did not represent the governor’s position.

Participants in the meeting said the option of raising taxes to offset the cuts, or of reducing the proposed $1.3-billion reserve to free up more money, were not discussed.

Assembly Speaker Willie Brown (D-Los Angeles) was noncommittal. “I want to absorb what his proposals really mean. It is really cuts and cuts only. The level and the expanse of the cuts seem extraordinary,” the Speaker said.

The Speaker’s counterpart, Republican Assembly Leader Ross Johnson of La Habra, said the governor’s proposal was “very preliminary.”

“He asked us to look at those options and any others that might be suggested and said we would meet again,” Johnson said.

Talk of cutting school programs drew an angry response from state Superintendent of Public Instruction Bill Honig.

Honig said such a cut would mean a $1.3-billion reduction in support for public education. He said that would “decimate” school programs and undermine voters who passed Proposition 98 two years ago. Proposition 98 guarantees schools at least 40% of the budget and provides that schools receive yearly funding increases tied to enrollments and inflation.

“A cut like that flies in the face of voters who passed Proposition 98. As it is, we would get only a 4.2% increase in the governor’s budget, which is less than the rate of inflation. I think the proposal on its face won’t work,” Honig said.

But if schools are spared cuts, the impact on other programs would be even greater.

Assemblyman John Vasconcellos (D-Los Angeles), chairman of the Assembly Ways and Means Committee, said that if the budget were cut 16%, it would mean a huge retrenchment for the state.

Vasconcellos said a 16% across-the-board cut would take $340 million from the University of California budget, the equivalent of eliminating 24,600 students, or the total enrollment at one campus.

Using the same yardstick, the Ways and Means analysis said $261 million would have to be cut from the California State University system, enough funding to support 44,000 students.

Continuing down the list, Vasconcellos said a 16% reduction would cut mental health services for 48,000 clients, eliminate 720 beds in state hospitals, terminate programs for 24,192 elderly and infirm persons under the In-Home Supportive Services program.

A 16% cut would mean $592 million would have to be taken from the Medi-Cal program, $352 million from the Department of Corrections and at least $200 million from county programs.

The spending plan approved by the Senate budget committee restores about $2 billion in earlier cuts recommended by Deukmejian.

These include $1.1 billion Deukmejian wanted to save by freezing welfare benefits at current levels, rather than passing on automatic cost-of-living increases, and another $1.1 billion the governor wanted to trim from various other programs. The committee version of the budget contains no reserve.

Sen. Alfred E. Alquist (D-San Jose), the committee chairman, said budget discussions will continue as the spending plan advances through the legislative process. Differences between Senate and Assembly versions of the budget will be hashed out during a two-house conference committee that will meet after the Assembly completes work on its budget in the next week or two.