Deukmejian Fails to Sell Bailout Proposal : Legislature: Governor meets with Senate, Assembly leaders but can’t produce agreement on $1-billion scheme to cut deficit. Lawmakers proceed with adjournment plans.

Lame-duck Gov. George Deukmejian met privately with legislative leaders Monday, but apparently failed to sell them on his $1-billion plan to deal with the steadily worsening state budget problem.

Deukmejian, who called a special session on the budget to run concurrently with the start Monday of the Legislature’s new two-year session, emerged from the meeting with polite assurances from Senate and Assembly leaders that they would give his plan to trim the budget a fair hearing.

Later, Democrats appeared in no hurry to take up the governor’s proposal, going ahead with plans to adjourn today for a month. They did say, however, that the budget bills would be heard by individual committees before Christmas. The Legislature had planned to meet for only two days this month, just enough time to allow members to be sworn in and organize for the working session beginning in January.

Deukmejian said that during the Monday morning meeting, which lasted longer than an hour, he tried to persuade legislative leaders to take action “as quickly as possible.” He told reporters later, “When you know that you’ve got a major problem, you should address it and you shouldn’t delay. If you just put it off it’s just going to be further aggravated.”

Passage of his $1-billion plan--calling for a $526-million cut in funds going to public schools and a sharp rollback of money set aside to pay for renter’s tax credits--would balance this year’s budget, at least on paper. It also would allow Deukmejian to leave office without an embarrassing deficit and salvage his claim that he took the state from IOU to A-OK.

But Democrats have made it clear they want to wait until Deukmejian’s Republican successor, Pete Wilson, takes office in January before they take major steps to close a growing shortfall that, according to a report released Monday, could reach $5.9 billion during the next budget year. Numerous tax increase proposals, which are not supported by Deukmejian, are circulating in the Capitol.

Democrats were hesitant to dismiss the governor’s plan outright, at least publicly. “There’s always a chance (that it could pass),” said Senate President Pro Tem David A. Roberti (D-Los Angeles) after a meeting with other Democrats. “But it is going to be very difficult.”

Roberti said the problem facing the state is much bigger than the $1-billion solution offered by Deukmejian. “This obviously is going to take much longer than two or three days to solve,” Roberti said, adding that he does not believe lawmakers can make up the entire $5.9-billion potential shortfall without some kind of tax increase.

The Senate leader angrily criticized Deukmejian’s proposal to roll back renter’s credits. “This budget should not be balanced on the backs of one segment of society, in this case, those who are not fortunate enough, or don’t have the money enough to be able to buy a home,” he said.

The governor’s budget bills may not be heard by a Senate committee until next week, or the week after. The Assembly Ways and Means Committee could take up the governor’s bills today, but even so, the full Assembly--like the Senate--was scheduled to adjourn today until the first week in January.

Sen. Bill Leonard (R-Big Bear), a member of the Senate Budget and Fiscal Review Committee who is carrying one of Deukmejian’s budget bills, said he plans to return to his district and await a call on when the bills will be heard. He said colleagues basically told him, “Don’t hold your breath.”

Wilson, meanwhile, sought to keep a distance from the budget fray. He said, however, that if legislative leaders reject the governor’s plan “they have an obligation to come up with some alternative.”

One interested observer Monday was former Gov. Edmund G. Brown Jr., who was invited to the Assembly to be on hand for the swearing-in of new lawmakers. Brown turned over the governorship--and a potential $1.5-billion deficit--to Deukmejian in January, 1983. Brown took most of the blame for the budget problem then, even though the economy was in a recessionary decline, just as it is now.

“He’s left the state far worse than he found it eight years ago,” said Brown, adding with a laugh, “Maybe now he can share some of the responsibility.”

The $5.9-billion shortfall projection was contained in a new report on the budget situation by Legislative Analyst Elizabeth G. Hill.

The latest estimate is substantially higher than an earlier projection by the Commission on State Finance that put next year’s shortfall at $4.3 billion. Roberti, for one, said the new report tended to further blur the problem, particularly since neither budget agency knows whether the important Christmas shopping season will meet expectations or produce further bad results in terms of sales taxes and other revenues going to the state.

“Our information is really scanty,” Roberti said.

In another development, Sen. Daniel E. Boatwright (D-Concord), chairman of the Senate Committee on Business and Professions, introduced proposed legislation calling for an end to tax favors given to the transportation, computer, and motion picture industries. The proposal, calling for new sales tax levies on purchases of boats and airplanes, cargo containers, custom computer programs, and the leases of motion pictures, plus a new tax on jet fuel, would raise nearly $1 billion a year.

“Before we call for our school, our kids and renters, to take the big hit that Gov. Deukmejian proposes, we ought to make sure that the big guys, with all the resources they can muster, are paying their fair share of taxes,” Boatwright told reporters at a Capitol news conference.