NEWS ANALYSIS : Conditions Aren't Ripe for Last-Minute Deals in Capital : Politics: Back-room talks on key issues may bear little fruit this year. Legislators may hold out on compromises until the next governor takes office.

TIMES STAFF WRITERS

With 10 days remaining before the end of the legislative session, prospects look bleak for many of the items on a long list of big-ticket issues lawmakers had hoped to resolve before their scheduled Aug. 31 adjournment.

Short of money and political will, legislators are deadlocked on health insurance, auto insurance, and a multibillion-dollar package of bond issues to pay for the state's investment in schools, prisons, and housing.

Also short of votes at the moment are bills to create an oil-spill response program and a measure to move up the date of California's presidential primary. The fate of about $480 million that Gov. George Deukmejian cut from the education budget also remains to be decided.

If history is any indication, the next eight or nine days will be a waiting game while lawmakers and the governor prepare to make their deals on the last night of the legislative session. None of the parties will want to reveal their final negotiating positions before they are forced to do so.

Instead, the Assembly and Senate will meet daily and grind out hundreds of measures addressing local needs or narrowly defined problems. Legislative leaders and the governor, meanwhile, will meet privately to see what compromises can be arranged on the major issues confronting California.

Despite the high stakes, a visitor to the floor of either legislative house this week would detect little sense of urgency. The Assembly spent much of Tuesday bidding farewell to five members who will be leaving at the end of this year. On Monday, the catcalls and interruptions reached such a high level that Assembly Speaker Willie Brown admonished the members that they were looking foolish on the television feed now being sent to cable stations statewide.

At one point, Assemblyman Rusty Areias (D-Los Banos) urged his colleagues to vote for his measure. "It's a good bill," he said without bothering to mention what the legislation would do. "It's a bad bill," replied a Republican opponent, also without elaborating. The measure was rejected.

The serious work, in other words, is done behind the scenes. But this year's back-room talks may not produce the kind of blockbuster, bipartisan agreements negotiated in the final hours of past legislative sessions.

With Deukmejian retiring, the Republican governor's desire to compromise and his leverage over lawmakers are probably as low as they have been since he took office in 1983. Rather than deal with him, the Democrats who control the Legislature may want to stall action on major legislation and gamble that fellow Democrat Dianne Feinstein will be elected governor in November. And many of them say privately that even Republican Pete Wilson, who is considered to be more flexible, would be better for their purposes than Deukmejian.

Brown, a San Francisco Democrat, acknowledged in an interview that lawmakers will be hard-pressed to break the logjam.

"The Legislature is always plagued with having to represent people," Brown said. "It's not a pretty event. You can't just make a decision to do something. You've got to reflect the views of your people in doing something. And if that doesn't constitute a majority, or can't be orchestrated to be a majority, then there's stagnation."

A prominent casualty of this stagnation is the effort to provide health insurance for more than 5 million Californians who lack coverage. About half-a-dozen interest groups--from consumers to doctors to business and labor--have advanced plans to tackle the problem, but no proposal has generated anything close to a consensus.

"The pressure is not strong enough yet to overcome the special-interest groups that you have to overcome to pass a package of bills," Senate Republican leader Ken Maddy said. "There have not been enough people who have really felt the squeeze in order to force the thing through."

On automobile insurance, Brown has been pushing for legislation to create a cut-rate liability policy designed for low-income drivers with few assets to protect. But Brown said he has talked little with the governor's office in recent weeks. He said he may take his chances with the next administration, hoping that Feinstein will win.

"I hope the governor at some point will signal his position," Brown said. "He hasn't yet. It's my guess he will not. I anticipate that Gov. Feinstein will."

One major bill that appears to have a clear path to enactment is a measure by Sen. Frank Hill (R-Whittier) to create a mandatory earthquake insurance program. The bill, sponsored by Deukmejian, would levy a surcharge averaging $36 on every homeowner's insurance policy to pay for $15,000 in coverage for property damage caused by earthquakes. The coverage is intended to complement private earthquake insurance, which typically comes with a deductible equal to 10% of the value of the home.

The bill has bipartisan support, and Hill said he did not think there is "any doubt" that the measure will make it to the governor's desk.

The oil-spill response issue is another that seems likely to be resolved, although it is deadlocked at the moment. The Senate and Assembly have been at odds over competing versions of a plan to tax the oil industry to pay for the cleanup of spills off the state's coast.

But with memories of the Alaska and Huntington Beach oil spills fresh in the minds of legislators--and voters--some sort of compromise on the issue is almost certain to emerge within the next week.

Less certain is the fate of a $3.6-billion package of bond measures that legislative leaders and the governor agreed to place on the November ballot. Assembly Democrats have objected to a Deukmejian proposal to assist first-time home-buyers, including some with annual incomes as high as $84,000.

Brown said the impasse could be broken if stricter income limits are placed in the proposal, along with a provision requiring the home-buyers to repay their low-interest loans sooner than would be required under the current legislation. But Maddy said he thinks Republicans have bent as far as they are willing.

"I don't think the governor is interested in compromising any further," Maddy said.

Democrats may use Deukmejian's housing proposal as leverage to wring last-minute concessions from him on education funding. The governor, when he signed the budget in July, cut about $480 million from the education spending program approved by the Legislature. Deukmejian said he wanted to use much of that money to reduce class sizes.

Democrats are seeking to restore the money, especially $355 million to give schools a 4.8% cost-of-living increase rather than the 3% allowed by the governor. Although some lawmakers believe it would be better to wait for the next governor, much of the education lobby wants to have the disputed funds distributed now, before the money is needed to offset another budget crunch.

"The most important thing is to try to get some money out to the schools right away and not have that money sitting in storage for God knows how much longer," said Sen. Gary K. Hart (D-Santa Barbara).

THE MAJOR ISSUES

Here is a summary of the major issues the Legislature will try to resolve before its scheduled Aug. 31 adjournment:

Bonds. Legislative leaders and Gov. George Deukmejian agreed to a $3.6-billion package of bond issues to pay for new schools, prisons and housing, among other things. But rank-and-file lawmakers have rejected the deal, primarily because of opposition to the governor's proposal to assist first-time home buyers. The issue is set for further leadership talks.

Health insurance. There has been little movement toward providing insurance for more than 5 million Californians who lack even basic coverage. Deukmejian Administration officials proposed requiring every business to provide insurance for its workers, but the governor distanced himself from the plan, removing much of the incentive for the opposing interest groups to agree to a compromise. A two-house conference committee continues to meet but is given little chance of reaching a consensus.

Automobile insurance. Assembly Speaker Willie Brown (D-San Francisco) is pushing for a low-cost auto policy for low-income drivers. But disputes between trial lawyers and the insurance industry have kept lawmakers from reaching an agreement. Brown is negotiating with Deukmejian but has said there is little hope of resolving the issue before the end of the session.

Oil spills. The Assembly and Senate have passed competing measures designed to prepare the state to respond to a major coastal oil spill. Both bills have been amended so that they are almost identical. The legislation calls for a 25-cents-per-barrel tax on oil to create a $150-million superfund. Blocking further progress on the bill is a proposal to give oil companies and their cleanup crews immunity from lawsuits. Trial lawyers say people should be able to sue for any damages these crews cause. A conference committee will probably resolve the dispute.

Earthquake insurance. A bill by Sen. Frank Hill (R-Whittier) would levy a surcharge averaging $36 on every homeowner's insurance policy. The fee would pay for earthquake coverage of $15,000 per home, designed to pay for the kind of minor damage most common even in major quakes. The bill is pending in the Assembly and is expected to pass.

Presidential primary. An agreement is apparently at hand to move the state's presidential primary from June to March, beginning in 1992. The state would hold a separate primary for legislative races in June. The move, intended to increase the state's clout in the nominating process, has been accepted by Democratic and Republican legislative leaders. Assembly Republicans are balking at the proposal because they want to move the legislative primary held in September. A conference committee is scheduled to meet today.

Education funding. Democrats are seeking to restore much of the $480 million Deukmejian cut from the education budget passed by the Legislature in July. Deukmejian set the money aside to pay for a reduction in class size, but Democrats and the California Teachers Assn. want most of the money to go for cost-of-living increases for the school districts, which they could use at their own discretion. If an agreement is reached in leadership meetings, it will probably be amended into another bill and moved through both houses of the Legislature.

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