NEWS ANALYSIS : Budget Impasse May Dent Wilson’s Stature : Politics: Governor stumbles into a morass similar to ones that have ensnared chief executives of other states.

With the collapse of negotiations, Gov. Pete Wilson early Thursday stumbled into the same budget soup that has ensnared several other governors who have failed to push tax and spending programs through their legislatures on time.

Govs. Mario M. Cuomo of New York and Lowell P. Weicker of Connecticut are two well-known victims, as are the governors of Illinois, Massachusetts, North Carolina, Ohio and Pennsylvania, among others. National statures have been diminished and ambitions set back.

“Failure to pass a budget is an embarrassment,” noted William Schneider, political analyst for the American Enterprise Institute in Washington. “Wilson had been the only governor I knew of in the budget crises facing most major states who was coming out looking good, looking heroic in steering a complex plan through a hostile Legislature. But now, if this (stalemate) goes on much longer, he runs the risk of looking like all those other governors who are failing.”

Wilson, increasingly talked about as a possible presidential candidate in 1996, still has time to minimize the damage to his national image as a pragmatic new Republican leader--a chief executive who can get things done. But as Senate President Pro Tem David A. Roberti (D-Los Angeles) asserted Wednesday night: “He has tried to position himself as a ‘can-do’ kind of person. And now he’s got to ‘do.’ ”

To summarize, state government began the new fiscal year Monday with Wilson and the Legislature still squabbling over the final pieces of a tax package needed to erase a $14.3-billion deficit and balance a $56.4-billion budget that had been passed June 20. Wednesday midnight was the legal deadline for Wilson to act on the budget. He threatened to veto it if the Legislature did not send him a $2.2-billion tax increase--on top of the $5.2-billion hike already enacted--plus a “reform” of workers compensation. He got neither.

But the governor and legislative leaders found a rarely used technical device to avoid a veto. At midnight, Wilson merely sent the budget bill back to the Assembly for a couple of minutes and Speaker Willie Brown (D-San Francisco) immediately returned it, thus starting a new 12-day deadline clock. The reprieve will run out on July 16.

Wilson and the Legislature, however, will not resume deliberations until Monday--as state government begins its second week without legal spending authorization. The first real crunch could come July 15 when some state employees are supposed to get paid and welfare recipients are due to receive their checks.

Mervin D. Field, director of the California Poll, said “it’s vitally important” for a governor’s public image that he get his budget enacted on time. After the deadline passes, he said, “it’s like a huge leak of political capital. A valve is open and there is this leaking every hour, every day. People see Sacramento as being in a mess. And the governor is right in the mess.

“They say to themselves, ‘Here we elected a governor who was supposed to knock heads and put it all together. What’s going on here?’ ”

Indeed.

The way most legislative leaders see it, Wilson reneged on his final tax hike agreement at the behest of corporate interests who persuaded him to hold out for some “reform” of the workers compensation program.

More precisely, what appears to have happened is that business interests--mainly two seasoned Capitol politicos, California Manufacturers Assn. President William Campbell and California Chamber of Commerce President Kirk West--persuaded recalcitrant Assembly Republicans that workers compensation “reform” was possible if they demanded it in trade for their tax votes. Their goal is to reduce employer costs by making it more difficult for injured workers to collect on stress claims.

Wilson long had advocated a reform of the costly program but it had not been one of his priorities, according to legislative leaders. “He told me he wanted ‘workers comp’ but didn’t want to hold up the budget for it,” said one negotiator.

Commented another, Senate Republican Leader Ken Maddy of Fresno: “I never thought he’d get hung out on workers comp. Assembly Republicans just hung him out. . . . He should have run with the package we all agreed upon and just said, ‘This is it.’ ”

Democratic leader David A. Roberti was much blunter, calling the Republican governor “a toady” of “his biggest fat-cat supporters.”

For months, Roberti, Maddy and Brown all had gotten along relatively smoothly with the new governor, given the normal knocks and scheming of political life. But they were disappointed, if not downright angered, by Wilson’s words and actions of recent days.

Roberti was particularly incensed by Wilson’s comment at a press conference early Thursday that “leveraging” the budget “is about the only way this Legislature--as corrupted as it has been by the (workers’) attorneys” will pass workers compensation reform.

The Senate leader, asked by reporters whether he had become more critical of the governor than he had been, replied: “Anybody who uses the magic word ‘corrupt,’ you’re not kidding--you’re not kidding. Especially from somebody who’s had representatives of the industry moguls coming in and out (of his office) changing his proposals.

“The governor has a very thin skin. I mean, not only can’t he take criticism, he can’t take a defeat in the Legislature. And that doesn’t bode too well, because you’re going to take a lot of them.”

Roberti and Brown also flatly denied a claim of Wilson’s that workers compensation reform somehow had been part of previous agreements the governor had negotiated with the legislative leaders. “We have necessarily kept it under wraps for the purpose of not embarrassing (some Democrats),” Wilson said.

“The governor is just not telling the truth,” Roberti declared, producing documents to show that the issue rarely had been discussed at negotiating sessions. “In generosity, this is hallucinating.”

Maddy was not happy because the state’s bond rating now could well be reduced by financial houses concerned about Sacramento’s fiscal situation. “That’s about a $200-million hit on the state of California for the next (fiscal) year,” he told the Senate--mentioning roughly the amount of money that will be raised by extending the sales tax to candy and snack foods.

Asked if this price was worth it, Wilson instantly replied: “Yes it is. Because the bond rating, while it is valuable, is not nearly as important as the cost to California, not just to employers, but the cost to workers and the cost to consumers . . . of workers’ compensation. You ask employers of businesses large and small what their No. 1 problem is. They’ll tell you it’s workers compensation.”

For most legislative leaders, however, Wilson’s timing could not have been worse.

Brown, who ironically has been the Republican governor’s staunchest ally in the Assembly, said his party may vote for some workers compensation reform, “but not through blackmail, not through extortion, not through leverage for a budget, not through leverage for taxes.”

So the honeymoon between the governor and the Legislature definitely is over. And some shine may be off Wilson’s national image as well.

“I’m sure,” Brown said early Thursday, “that he would have been much better off if on the news over the next three days, including the Sunday talk shows, when they do the assessments nationwide of proper management, if they’d been able to point to California as the state with the largest deficit, as the state that solved its problem in record time and on time and as the state that raised the largest amount of taxes under a Republican governor with a Democratic-controlled Legislature doing it. He would have been heralded for his leadership. That will just have to wait a few days.”

BACKGROUND

Gov. Pete Wilson’s decision to return the budget to the Legislature without his signature will give the Republican governor and legislative leaders an additional 12 days to work out their differences. Although the state has no authority to spend money without an approved budget, the California Constitution and recent court orders require continued payments for health and welfare programs, schools and bonded debt. With or without the budget, the state will begin collecting about $5 billion in new and higher taxes July 15. These levies, including a 1 1/4-cent sales tax increase, were signed into law under separate legislation. Lawmakers are to resume negotiations Monday.