Governor, Legislative Leaders Go Private in Budget Negotiations

Gov. Pete Wilson and legislative leaders took their budget negotiations from public to private Wednesday, meeting for more than two hours in intensified talks aimed at finding a solution to the state’s $14.3-billion deficit.

Neither Wilson nor the two Republican and two Democratic leaders who met with him reported any agreements, but the Republican governor said the budget talks included all of the various options that have been proposed in recent weeks, including Democratic tax proposals that Wilson has called unacceptable.

“We are going to be meeting daily, and we have no details to report at this time. It was a useful discussion,” Wilson told reporters after the meeting. “We just don’t have anything to tell you at this point.”

Moments later, Wilson returned to his private office and signed a Proposition 98 school funding measure that just the day before had stalled in the Assembly and led budget negotiators to gloomily predict rough waters ahead in their efforts to produce a spending plan in time for the July 1 start of the 1991-92 fiscal year.

The Proposition 98 bill, when compared to other tax and budget cut bills taking shape in the Legislature, is relatively uncontroversial. Basically, it formally puts school districts on notice that the state expects to be repaid at least $835 million of roughly $1.2 billion in overpayments districts will receive this year as the result of miscalculations on the level of financial aid they were entitled to under Proposition 98.

The measure fell woefully short of the votes it needed for passage Tuesday, but on Wednesday Assembly Speaker Willie Brown (D-San Francisco) rounded up additional Democrats and Wilson got enough Republicans to support the bill to win passage on a 45 to 11 vote.

Four Republicans who had either voted against the bill or not voted at all when it came up on Tuesday broke ranks with Assembly GOP leadership and supported the measure. Assemblyman William H. Lancaster (R-Covina), while denying Administration arm twisting along with the other GOP lawmakers who voted for the bill, said “the governor wanted the bill on his desk and I wanted to support him if possible.”

Several of the lawmakers who switched their votes from no to aye on the Proposition 98 bill were guests of the governor at his home Tuesday night.

Democrats viewed the defections as significant because they believe that Wilson will have to round up Republican votes on his own in the Assembly since GOP leaders in that chamber so far are refusing to go along with his budget plan, which calls for nearly $7 billion in tax increases.

Assemblyman John Vasconcellos (D-Santa Clara), chairman of the Assembly Ways and Means Committee, said, “I think things are starting to move.”

Vasconcellos circulated a letter to lawmakers Wednesday urging them to act on a $15-billion budget plan he and other members of a two-house budget conference committee have drafted. Vasconcellos, a veteran lawmaker, said that because of the deficit “I find myself more frightened about prospects for our future than at any other time in my quarter century here in the Legislature.”

The conference committee plan, which was reviewed during the discussions between Wilson and legislative leaders later in the day, would raise taxes by $7.2 billion, cut spending by $4.7 billion and make up the rest of the deficit through various accounting changes, raids on special funds and fee increases.

As for the meeting in Wilson’s office, it broke up with negotiators imposing a gag rule on themselves--a sharp contrast to previous negotiating sessions when the participants ebulliently poured forth their versions of the closed-door talks.

Using almost the same words as Wilson, Speaker Brown said, “We will continue to meet every day until we get a budget.”

While refusing to discuss specifics, Senate President Pro Tem David A. Roberti (D-Los Angeles) and Senate GOP floor leader Ken Maddy of Fresno said the bargainers combed through proposed tax increase and budget reduction issues one by one and examined the “ripple effect” each had on the others.

“It’s a perception, a feeling that we have that we are making progress,” said Maddy, a veteran budget negotiator. “Nobody’s walking out. Nobody’s throwing books on the floor. We haven’t done anything disruptive.”

Roberti said fashioning a negotiated budget was like creating a gelatin dessert, adding that “things are starting to jell, but it’s still in a liquid state.” He refused to say whether he was hopeful that a new spending program could be agreed upon by Saturday, one of several deadlines that have been unofficially imposed for enacting a state budget.

A Wilson spokesman, Franz Wisner, said: “It’s real encouraging that they are going to meet every day. The lines of communication are wide open.”

To keep the pressure turned up and philosophically express their position, Roberti said Senate Democrats still intend today to try to pass a bill opposed by Wilson to increase income taxes paid by wealthy Californians. A similar bill that would earmark the proceeds for education failed in the Assembly on Tuesday.

Times staff writer Jerry Gillam contributed to this story.