$3.6-Billion in Proposed Budget Cuts Unveiled : State finances: The governor’s list of possible reductions would hit schools the hardest. Honig sees the proposed trims as devastating.

Gov. George Deukmejian, refusing to budge from his insistence that the state has to solve its financial troubles with spending cuts and not new taxes, Monday unveiled a $3.6-billion list of possible budget reductions that would hit public schools the hardest.

“I said before that I would take the heat and that offer still stands,” he said in a statement issued with the seven-page list of cuts--which also target prisons, state-supported universities, and health, welfare and other human service programs--from the budget of approximately $55 billion.

Under the plan the governor would slice $800 million from public schools and community colleges and suspend funding protections for schools that were put in the California Constitution by voters with Proposition 98 in 1988.

State Supt. of Public Instruction Bill Honig said the governor’s budget plan “is going to devastate schools if they go ahead with it.”

“I don’t think this is going to fly,” Honig said, noting that lawmakers would be required by law to put back in the next budget year any money they removed now.

Democratic legislative leaders noted that Monday’s proposal marked the first time that Deukmejian has spelled out exactly how he would close the $3.6-billion gap between budget revenues and spending demands for the 1990-91 fiscal year that will begin on Sunday.

In other budget developments Monday:

Republicans and Democrats in the Assembly reached tentative agreement on nearly $1 billion of the cuts earlier sought by Deukmejian. Their plan was announced just hours before Deukmejian released his plan of more expansive cuts.

Senate President Pro Tem David A. Roberti (D-Los Angeles)--taking an entirely different tack than Deukmejian--released a list of suggested tax and fee increases that would raise $1.9 billion next year. The Roberti list, which the Senate leader said should be part of the negotiations, would raise $1.3 billion through adjustments in personal income tax brackets and a tightening up of allowances for writeoffs and credits. Freezing motor vehicle license fees at present levels and not allowing cars to be depreciated would generate another $350 million. A host of fee increases would raise the rest.

The Assembly rejected an alcohol tax increase measure, but legislative leaders said they hope to be able to round up enough votes to ultimately win approval for the proposed constitutional amendment. The tax, which would require voter approval, went down on a 26-19 vote. It needed 54 votes, or a two-thirds majority, for approval.

Backed by the beer, wine and liquor industry, it would raise taxes on alcoholic beverages by $200 million, just about one-quarter of the amount that would be raised by the much-tougher nickel-a-drink ballot initiative that will be offered to voters in the November general election.

Defeat of the measure is expected to spark negotiations that could lead to a tax bill that would entail an alcohol beverage tax hike that would be much closer to the 5-cents-a-drink measure.

Assembly Speaker Willie Brown (D-San Francisco) said he would like to see revenues from the tax measure used to help wipe out $260 million in welfare benefit cuts that Deukmejian wants to make.

Deukmejian, in announcing his proposal, insisted that schools would still get more than 40% of state general purpose revenues and the equivalent of a 5.7% increase. Under existing law, schools are slated to get close to a 42% share of the budget. Honig contends that schools would effectively lose any kind of an inflation-related budget adjustment with the Deukmejian plan.

Without the cuts, the governor said, spending would continue out of control and require roughly $37 billion in new taxes over the next five years “just to keep pace with built-in spending pressures.”

Under the plan, most state programs would be reduced uniformly by 3% from what Deukmejian had submitted in January. However, many programs would still grow over what they are this year.

Deukmejian’s plan would also eliminate $200 million in renters’ credits for poor people who pay no income taxes. It would freeze welfare benefits at current levels and make dozens of additional cuts in health and other human service programs.

Many of the proposed cuts are holdovers from Deukmejian’s January budget plan, including a reduction of $95 million in the state’s workfare program for welfare recipients known as Greater Avenues for Independence; $150 million to county health care services, and a freeze in benefits to welfare recipients and aged, blind and disabled persons receiving state assistance. They are scheduled to receive 4.6% increases.

Other cuts on Deukmejian’s list are proposals to trim $109 million in aid to counties for programs mandated on local governments by the state, and $12 million from the California Arts Council--more than half of its current budget.

The governor’s plan would also cut $99 million from the University of California budget and more than $50 million from the California State University budget.

Several hours before the governor announced his $3.6-billion cut, the Assembly speaker, working with an earlier set of cuts, indicted there was bipartisan support in the lower house to many of the governor’s proposals.

He said there was support for the higher education cuts, the reduction in the Arts Council cuts and portion of the reduction in county health services.

“We’re probably somewhere near $1 billion now in recommended cuts that I would support,” Brown told reporters, making it clear that negotiations were still under way.

Brown, however, said Democrats are still opposed to a proposed $24-million cut in family planning services sought by Deukmejian and reiterated he is opposed to the freeze in welfare benefits.

The speaker said he still wants to eliminate funding in next year’s budget for two Los Angeles County prisons, one near downtown and the other in Lancaster. Deukmejian is not expected to go along with the proposal.