Democrat School Aid Proposal Rejected : Education: Plan passes Senate but fails in Assembly. It would have allowed governor to avoid suspending a measure that guarantees specific funding level for education.

A carefully crafted budgetary sleight-of-hand engineered by Democrats to ease funding problems for the state’s beleaguered school system collapsed Friday in the face of a solid wall of Republican opposition.

With time running out, Democrats tried to win legislative approval of a new budget procedure that their leaders hoped would have made it easier for Gov. Pete Wilson to avoid suspending Proposition 98, the initiative that guarantees a certain funding level for public schools and community colleges.

Wilson has pushed hard for suspension of Proposition 98 to help meet an estimated $14.3-billion budget deficit. But his efforts have been strongly opposed by educators and Democrats, who contend that it would take years to regain the lost revenue for schools if Proposition 98 is ever suspended.

Despite Wilson’s stand, Democrats said he indicated during a hurried meeting in his office Friday that he considered their plan a middle ground he could probably live with.

The Democratic proposal, fashioned in recent days by the bipartisan budget conference, committee, called for schools to be partly funded by an emergency loan, rather than a regular appropriation.

In this way, school funding would be reduced, as Wilson has sought, but the move would not require suspension of the voter-approved initiative, considered a bad precedent by legislative Democrats and education interests. However, even with Wilson’s implied approval, Republicans in both houses refused to vote for the measure.

In the Senate, they simply declined to answer the roll call, allowing the Democratic majority to pass it with a 22-1 vote. In the Assembly, they voted “no” as a block and the proposal failed to muster the 41 “ayes” needed for passage.

“We could have put the bill out if we had gotten the Republicans,” said a dejected Assemblyman Tom Hannigan (D-Fairfield), the prime author of the plan.

Assembly Minority Leader Ross Johnson (R-La Habra) said the measure got caught up in a political squabble between Democrats and Republicans over which side had education’s best interest at heart. He said Republicans were piqued because Democrats had, on the one hand, been accusing them of being “anti-education” while on the other they were trying to win their votes for Democratic-backed education measures.

“The Republicans don’t want our Democrat friends to play political games . . . they’re attacking us in an outrageous and demagogic fashion as being against public school kids,” he said.

In the upper house, where relations between Democrats and Republicans were more amiable, Sen. Rebecca Morgan (R-Los Altos Hills) said Republicans simply saw no need to vote for a potentially controversial measure that already had enough Democratic support to win passage.

Although Proposition 98, approved in 1988, guaranteed public schools and community colleges about 40% of general fund revenues, a later initiative modified this to say that in bad economic years, schools would get less.

Because of the current recession, schools and community colleges have received about $1.2 billion in “overpayments” during the current school year.

Under the Democratic plan, in the short run, the schools would not have to repay that total amount. And in the long run, if the revenue picture improves, as expected, the state would be able to provide the full amount guaranteed by Proposition 98.

The Democratic proposal would have reduced current school year appropriations by $835 million and replaced those funds with an $835-million “emergency loan,” to be paid back next year.

But the plan still would leave a gap of $825 million between what Proposition 98 guarantees and what the governor has proposed.