Wilson Budget Will Be Rejected, Brown Predicts

Legislative Democrats will insist on changes in Gov. Pete Wilson’s proposal to erase the state’s $12.6-billion shortfall because the Republican governor’s current plan would hurt the poor while protecting California’s wealthiest residents, Assembly Speaker Willie Brown said Tuesday.

Brown predicted that the Democratic-dominated Legislature would reject Wilson’s proposed rollback of welfare grants to 1988 levels and push the Republican governor to replace part of his proposed 1 1/4-cent sales tax increase with higher income levies on the state’s top earners.

The Speaker’s comments were in line with recent statements by Senate President Pro Tem David A. Roberti (D-Los Angeles), who has said he would like to raise taxes on the rich and vowed to resist the deepest cuts in poverty programs.

Taken together, the positions adopted by the two legislative leaders create a formidable political hurdle for Wilson’s budget plan. Although Democrats do not have the two-thirds majorities required to pass a budget in both houses, they can block the governor’s proposal. Despite his differences with the governor, Brown said legislative budget writers are on schedule to produce votes on a negotiated budget outline by May 19 in both houses of the Legislature. That is three weeks after today’s target date set by Wilson but well before the June 15 deadline in the state Constitution.

Meanwhile, a Senate-Assembly conference committee approved $1.3 billion in budget cuts Tuesday, including a freeze on welfare grants, but balked at Wilson’s plan to cut grants, reduce the renter’s tax credit and eliminate a program to help the homeless obtain permanent shelter.

In all, Wilson has asked for $6.7 billion in new taxes, about $4.8 billion in cuts and $1.4 billion in bookkeeping changes.

Brown, in his first press conference since Wilson disclosed his plan, criticized the governor’s tax-increase proposal for relying almost entirely on a boost in the sales tax, which, he said, hits hardest those who are least able to afford it.

Brown said: “If you’re going to do some taxes, or taxes in the $7-billion (range), don’t do them all just out of poor people, don’t do the major portion of it out of poor people. Share the burden among those who are able to afford it at the upper income level.”

The powerful San Francisco lawmaker suggested that Wilson lower his sales tax increase proposal to three-quarters of a cent and raise the income tax rate from 9.3% to 11% on individuals earning $100,000 a year and couples making more than $200,000 a year.

The top rate was lowered in 1987 as part of the Legislature’s effort to conform the state’s tax code to the federal system.

“Those (couples) who earn $200,000 a year and above--they are clearly in a position to give up the tax break we gave them several years ago,” Brown said.

On the spending side, Brown said flatly that Democrats would not go along with Wilson’s $225-million proposal to reduce grants to poor mothers with children in the Aid to Families With Dependent Children program.

Democrats, abandoning for the second year in a row their longtime insistence that the grants be increased annually to keep pace with the cost of living, have agreed to freeze the payments at their current levels. Wilson wants to cut the grants by 8.8%, from $694 a month to $633 for a mother and two children.

“There will not be a reduction in AFDC grants, period,” Brown said. “It will not pass either house of the Legislature.”

Brown also said the Democrats will continue to fight Wilson’s proposal to suspend Proposition 98, the voter-approved constitutional provision that guarantees public schools about 40% of the state’s general fund. He said the majority party was willing to accept about $1.3 billion in education cuts, about $800 million shy of Wilson’s target.

To replace the welfare and education cuts the Democrats oppose, Brown suggested that Wilson accept Senate Republican Leader Ken Maddy’s proposal for $600 million in prison system reductions, plus another $300 million across-the-board cut in all state programs.

This is the kind of bargaining that accompanies every state budget debate, but it is the sort of thing Wilson seemed to be shying away from when he made his latest proposal April 25. He described that plan as “not a negotiating stance” but a “budget solution.”

Brown rejected the notion that Wilson was trying to deliver an ultimatum.

“It’s clear the budget still has to be negotiated,” Brown said.

Wilson Press Secretary Bill Livingstone seemed to concede that point Tuesday. Livingstone, asked if the governor would sign a budget that did not include his proposed welfare cuts, said, “It’s part of the negotiations.”

On a related matter, Livingstone said Wilson declined Brown’s invitation for a special budget session of the full Assembly today--the day the governor had set as his early deadline for passage of the budget--because “everyone wanted a chance to examine the budget before quickly moving forward.”