Democrats Agree on Budget Plan : Finances: Their version differs from Gov. Wilson’s on several key points. His sales tax hike would be halved and income tax on the wealthy would rise.

Democrats in the Legislature reached a consensus Monday on an alternative budget plan that includes $14 billion in cuts and tax increases that they intend to present today to Republican Gov. Pete Wilson.

The plan, put together by budget negotiators appointed by Assembly and Senate leaders, is in agreement with much of what Wilson has proposed, incorporating nearly all of the governor’s recommended tax increases and many of his spending cuts.

But it differs markedly from Wilson’s budget proposal on several core issues.

The Democrats’ plan does not include four major budget reductions sought by Wilson: suspension of Proposition 98 financial aid guarantees for public schools and community colleges, an 8.8% reduction in basic welfare grants, a cut in the renter’s tax credit and elimination of the state’s homeless assistance program.

It would retain half the 1.25% sales tax increase Wilson is seeking and increase the top rate of the personal income tax from 9.3% to 10.8% for individuals with incomes above $100,000 or people filing joint returns of $200,000 or more. It also would reduce the amount that corporations can claim on their tax forms for business lunches by $475 million over the next two budget years. Wilson opposes boosting income tax rates and has been generally negative about taxes that affect businesses.

Also, the package by Wilson and his budget aides assumes a $12.6-billion shortage and proposes service reductions and tax increases of that amount to balance the budget. But Democrats have been using a $13.6-billion shortfall figure supplied by Legislative Analyst Elizabeth G. Hill. They say all indications are that when Wilson comes out with a revised set of budget estimates next week, the total will reach $14 billion.

The final votes on the plan have yet to be taken, but Democrats, who control the Legislature and the conference committee, were in agreement on all the basic points of the proposal. The two Republicans on the six-member committee have consistently voted against the Democratic plan.

Lawmakers said they will outline the proposal to Wilson today in private meetings.

Assemblyman John Vasconcellos (D-Santa Clara), chairman of the Assembly Ways and Means Committee, said he believes the plan, which came together late Monday, “strikes the right balance.” He predicted that “nobody will like it.”

Sen. Frank Hill (R-Whittier), one of the two Republicans on the committee, said, “We will see where the governor stands. When the governor proposed that sales tax increase, was that a floor or was that a ceiling? He said at the time that it was the ceiling and said it was reasonable. Now we’ll see.”

Hill said he opposed the plan because it did not contain enough budget cuts. Earlier in the day, the committee voted an additional $175 million in cuts to state programs, bringing the total in budget reductions made by the committee over the last two weeks to nearly $4.2 billion.