THE LEGISLATURE ADJOURNS : New School Year, Old Worries : Education: Districts not sure how much money they can spend. Deukmejian blames end of budget talks on Honig and teachers’ leader, who both blame the governor.

As classes resume this week, the failure of Gov. George Deukmejian and the Legislature to agree on a school funding plan has left school officials up and down the state wondering how much money they have to spend this year.

After the collapse of once-promising negotiations late Friday, Deukmejian blamed the failure on State Supt. of Public Instruction Bill Honig and California Teachers Assn. President Ed Foglia--who both blamed Deukmejian.

In the governor’s weekly radio talk Saturday, he said spending on kindergarten through 12th-grade education has increased by 65%, adjusted for inflation, during his eight years in office. Yet, “the whining and complaining and cries of poverty from much of the school establishment continue,” he said.

Deukmejian blamed Honig and Foglia for scuttling his $220-million proposal to reduce the student-to-teacher ratio in California’s overcrowded classrooms.

Honig responded that Deukmejian was so “stubbornly determined to get the teachers” that he refused to accept a compromise that had wide acceptance in the state’s education community and among legislators in both parties.

The governor and his aides are “the gang that can’t shoot straight,” the schools chief said. “They aimed at the teachers and they hit the kids.”

“There wasn’t any leadership, there wasn’t any compassion” on Deukmejian’s part, Foglia said. “He is a very stubborn individual, whose main interest seems to be . . . making sure teachers don’t get any more money.”

While the governor was swapping insults with Honig and Foglia, local school officials were trying to figure out how much money they will have available for this school year.

Their dilemma is whether to spend all of the money they now are receiving from state Controller Gray Davis, checks that reflect the 4.76% cost-of-living adjustment increase for schools that was voted by the Legislature, or only the 3% included in the final budget Deukmejian signed on July 31.

Statewide, the difference between these two cost-of-living figures amounts to about $355 million. In the Los Angeles Unified School District, by far the state’s largest, the difference would be about $40 million.

Mark Schrager, a budget officer for the Los Angeles schools, said the district will spend at the 4.76% level because it needs the full amount to balance this year’s budget.

“We’re betting on Gray Davis,” Schrager said of Davis’ decision to ignore the governor’s 3% cost-of-living increase figure and pay schools at the higher 4.76% rate. Schrager said that he believes Davis has the legal authority to pay the higher rate.

But other school districts are taking a more cautious approach.

Tom Payzant, superintendent of schools in San Diego, said that system will use the 3% figure because “that appears to be the law, as we understand it.”

Officials of several school districts said they will wait for further clarification before deciding which figure to use.

Because the dispute involves two state constitutional officers--the governor and the controller--”the courts are going to have to tell us what the COLA (cost of living) is,” Payzant predicted.

Meanwhile, a dozen Republican state senators have asked state Atty. Gen. John K. Van de Kamp to investigate the Davis school payments, an action they describe in a letter as “not only unwise but illegal.”

Several times during intense talks that continued all last week, it appeared that state Sens. Gary K. Hart (D-Santa Barbara) and Becky Morgan (R-Los Altos Hills) and Assemblyman Pat Nolan (R-Glendale) had succeeded in negotiating a compromise between the governor and the education groups.

But the agreement foundered on the cost-of-living issue. Deukmejian insisted on an unequivocal statement that the hike would be 3%, no matter what was done on some of the other matters in dispute. But the education leaders, especially Honig and the CTA leadership, were unwilling to agree to that.

The $500 million that was held back by Deukmejian includes the difference between the two cost-of-living rates, plus another $200 million that Deukmejian set aside when he signed the budget.

Some of this money--$189 million--was to be used for class-size reduction, which would have made a slight dent in California’s pupil-teacher ratio, second highest in the nation after Utah. The budget does include $31 million to be used for class-size reduction.

In a statement Saturday, the governor said it was “sad that the legislative majority couldn’t summon the courage to stand up to” CTA and Honig, “who want to put virtually all of the new school money into higher salaries at the expense of smaller classes.”

However, both Honig and Foglia said $200 million for class size reduction--only $20 million less than the governor was seeking--was part of the final compromise offer the education group made on Thursday.

Although there was no agreement on major school funding, the Legislature passed a few bills on lesser education issues.

A new incentive program for school districts that fully utilize classroom space by moving to a year-round schedule was approved. Of the $27 million included in the legislation, $15 million to $16 million would go to Los Angeles.

Another bill that was sent to the governor would restore the California Assessment Program (CAP), the principal state instrument for measuring schools’ progress. Deukmejian eliminated money for CAP when he signed the budget. Senate Minority Leader Ken Maddy of Fresno warned lawmakers Friday night that Deukmejian would veto the program, just as he did earlier this summer.

Funds for Indian education centers were contained in another bill the Legislature passed but legislation to restore driver training for about 300,000 high school students each year was defeated.

THE HIGHLIGHTS Following are highlights of actions taken by the Legislature in action late Friday and early Saturday: ISSUE: Protecting coastal environment from major oil spills.

PROPOSAL: Tax oil companies 25 cents per barrel to create a $100-million oil spill prevention and cleanup fund. Centralize cleanup responsibilities in a single state government agency.

ACTION: Sent to governor, who is expected to sign it.

ISSUE: Damage to homes caused by major earthquake

PROPOSAL: Tax homeowners $12 to $60 a year to create an earthquake recovery fund. Homeowners whose property is damaged in a quake would be eligible for at least $15,000 and up to $27,000 for repairs and living expenses.

ACTION: Sent to the governor, who is expected to sign it.

ISSUE: State-financed construction

PROPOSAL: Placed on the Nov. 6 ballot nine bond issues worth $3.3 billion to build new prisons, jails, schools and low-cost housing as well as child-care centers, water treatment plants and courthouses.

ACTION: Sent to the governor, who is expected to sign it.

ISSUE: More than 60 million gallons of used motor oil disposed of annually in state.

PROPOSAL: Require oil manufacturers to pay the state a 5-cent deposit on each quart of motor oil sold. Motorists who bring used oil to a certified oil collection center would get back 5 cents a quart. Shops that change motorists’ oil would receive the deposit money in return for agreeing to accept used oil from the general public.

ACTION: Sent to the governor, whose position is unknown.

ISSUE: 5 million Californians lack health insurance coverage.

PROPOSAL: Create a program requiring employers to pay a health care tax or provide a minimal package of medical benefits for their workers. Enact new rules to make insurance more affordable to small businesses and control the increases in doctors’ fees and hospital rates. Legislation would be subject to approval of financing package by Legislature in 1991 and voters in 1992.

ACTION: Approved by Senate-Assembly conference committee. Died in both houses, after governor threatened veto.

ISSUE: About one-fourth of California drivers lack auto insurance.

PROPOSAL: Create a low-cost policy for good drivers by dropping requirement that all motorists carry liability insurance that pays damages for “pain and suffering.” Drivers would still be obligated to carry insurance that pays for property damage and medical costs.

ACTION: Passed in the Assembly. Died in Senate Judiciary Committee.

ISSUE: Some politicians think state has less clout in selecting presidential candidates because its June primary election is among the last held in the nation.

PROPOSAL: Hold primary earlier--the Tuesday after the first Monday in March. Ban ballot initiatives from the presidential primary ballot.

ACTION: Failed in the Assembly.

ISSUE: Legislature’s education budget contained 4.76% cost-of-living increase for schools while governor allowed 3%.

PROPOSAL: Increase cost-of-living payments to schools and create a program to reduce class size in selected subjects.

ACTION: Negotiations collapsed. Neither house voted.