Senate Leaders Agree on Taxes, Spending Cuts : Budget: But governor says he wants no tax hikes. Initial reaction from Assembly leaders is also negative.

Senate leaders reached a shaky agreement on about $1 billion in spending cuts and $1 billion in tax increases Saturday, but the budget deal came together as Gov. George Deukmejian took to the air to declare that new taxes are not the answer to the state’s fiscal troubles.

The Republican governor, during his weekly radio address, issued a plea to the Democratic-controlled Legislature to send him a 1990-91 state budget balanced entirely by $3.6 billion in cuts.

“One thing’s for sure. Tax increases won’t solve the problem. They would only make the problem worse,” Deukmejian said.

Senate President Pro Tem David A. Roberti (D-Los Angeles) said the timing of the governor’s remarks “wasn’t helpful.”

Nevertheless, Roberti said he and Senate Republican Leader Ken Maddy of Fresno would meet today with Deukmejian to try to sell the governor on their plan.

The Senate leaders made it clear that they were unsure how Deukmejian would receive the plan.

Roberti appeared somewhat shaken after he emerged from a closed-door meeting during which he outlined the plan to fellow Democrats, a session he described as “a bare your souls kind of caucus.”

Neither he nor Maddy disclosed specifics of the plan. They said it included numerous tax and spending reduction proposals. The tax proposal would include a variety of income, sales and fee increases. Given an earlier agreement that budget negotiators would not touch aid to public schools, most of the spending rollbacks would fall on health and welfare programs.

The Senate leaders worked out the deal themselves, but indicated they would be able to get it approved on the Senate floor. They did not draw Assembly leaders into their latest talks.

The reaction in the Assembly, when word filtered out, was generally negative.

Assemblyman John Vasconcellos (D-Santa Clara), chairman of the Assembly Ways and Means Committee, said the plan could mean as much as $2.6 billion in spending cuts--the $1 billion agreed to by the Senate leaders and the $1.6 billion that Deukmejian could cut with his vetoes. “I am not voting for that level of cuts--ever!” Vasconcellos said.

Assembly Speaker Willie Brown (D-San Francisco) said that “$1 billion is probably the most cuts anybody can ever tolerate.”

On the other side of the political fence, Assembly Republican Leader Ross Johnson of La Habra said the $1 billion in tax increases presented GOP lawmakers with “a real problem.” Some Republicans, like Assemblyman Tom McClintock of Thousand Oaks, said they would not vote for any kind of tax increase.

Deukmejian, who spent much of Saturday in Oakland attending a wedding, chastised the Legislature for allowing a week to pass since the start of the new fiscal year without producing a budget.

“We have lost our authority to write checks, pay bills and meet payrolls--and as the days go on, greater disruptions in state services will be felt,” he said in his radio address.

During the speech, Deukmejian continued to insist that a retrenchment in spending is in order because various laws, initiatives, court orders and federal requirements are driving up the cost of government faster than the state’s ability to pay for it within the existing tax structure.

Deukmejian said that even with $3.6 billion in spending reductions, the state budget would contain $53.8 billion for state services, which he said was $4 billion, or an 8.1% increase, over last year’s budget.

In a slap at Democrats, Deukmejian said: “I know that the medicine I have prescribed is not easy to swallow, particularly for those legislators whose personal political philosophy dictates that government spending is sacred and should go up every year.”

The most immediate disruptions caused by the budget impasse have been felt by health and welfare services.

The California Assn. of Health Facilities said that state-supported nursing homes have not been paid for care rendered during June, warning that “many homes are now unable to meet their first-of-the-month payrolls.”

Tulare County has ordered that payments to welfare recipients or aged, blind and disabled people receiving special state Social Security supplements be held up until the state budget is enacted. The county has mailed warnings to more than 43,000 people receiving Aid to Families with Dependent Children and 3,700 receiving the Social Security supplements.

County officials said the action was prompted because of a cash flow crunch created by the state’s inability to send the county $17.2 million in motor vehicle license fees, cigarette tax revenues and state grants for trial courts.

Although all counties are hurt by the lack of state funds, cash flow problems mostly affect rural counties.