Legislature Will Resume Wrestling With Wilson : Politics: Election-year considerations and budget woes are likely to add to the contentiousness between lawmakers and the governor.

Facing election-year pressures and the nonstop unraveling of the state budget, the 1992 Legislature will convene Monday in what promises to be an even more abrasive encounter with Gov. Pete Wilson than last year.

“It won’t be kissy-kissy,” warned combative Senate Leader David A. Roberti of Los Angeles, after taking the political pulse of his fellow upper-chamber Democrats.

“My guess is it’s going to be a very, very nasty session,” said lobbyist Ruth Holton of California Common Cause.

Wilson, starting a tumultuous second year as governor, will outline his program for California on Wednesday in a televised State of the State speech to the Legislature. On Thursday, he will submit his recession-pruned budget for the next fiscal year.

As lawmakers return to the Capitol, they will find high on Wilson’s agenda his proposal to dramatically cut back welfare grants to needy mothers and children--part of his plan to narrow the gap between taxpayers and what the Republican governor calls “tax receivers.”

Although Wilson and legislative leaders agreed informally last fall that taxes would not be increased in 1992 because Californians already are “taxed to the max,” the deal seems to have fallen apart. Wilson has called for elimination of the $400-million renters’ income tax credit to shore up the budget, and Democrats are talking about reciprocating with higher taxes on businesses and the wealthy.

The legislators will return to issues whose solutions long have eluded them: development of a health insurance program for 6 million uncovered Californians, reducing the high cost of automobile insurance, protecting forests from overzealous logging, and pumping up the flat economy.

There is pessimism that 1992 will be able to set a new standard for accomplishment by the governor and Legislature, for two reasons:

* The recession has reopened huge holes in the $55-billion state budget in spite of $14.3-billion worth of tax increases, spending cuts and bookkeeping gimmicks enacted last summer that were supposed to keep it in balance. Even now, the shortfall is estimated at $3.4 billion to $6 billion and is expected to worsen.

* Many legislators are struggling with reelection uncertainty. The lawmakers’ reapportionment safety net was ripped apart by a Wilson veto and the issue was handed to the state Supreme Court to enact new districts. Later this month, the court is expected to adopt political boundaries that will put incumbents running for reelection in unfamiliar territory and pit some against each other.

Additionally, the plan appears to strengthen GOP hopes of reversing the long domination of the Assembly by Democrats and their Speaker, Willie Brown of San Francisco.

Combine the necessity to align the budget by enacting more cuts in services with the preoccupation for self-survival of incumbents, and the chemistry emerges for confrontation with the governor and among legislators themselves.

Roberti, who with Wilson, Brown and Senate GOP Leader Ken Maddy of Fresno overcame philosophical differences last summer to fashion the current state budget, said he welcomes confrontation as an essential ingredient of democracy. “It has to be confrontational; that’s how you make choices,” he said.

In November, when Wilson announced his proposed ballot initiative to cut back grants in the sprawling Aid to Families with Dependent Children welfare program, the governor said he also intends to submit it to the Legislature as a bill, although he showed little confidence that it would be approved by lawmakers.

The proposal also contains a less-publicized provision that would, in effect, waive the Legislature’s power over the purse by empowering the governor to declare a “fiscal emergency” under certain conditions and authorize him to make some spending cuts unilaterally, including the pay of state employees.

As expected, legislative Democrats deplored Wilson’s proposed “power grab,” as did some Republicans, but privately.

Roberti recently indicated an apparent softening in Senate Democratic opposition to certain welfare cuts, even though the Wilson proposals would be the second round of benefit reductions in as many years. Roberti suggested that some Democrats are inclined to support the proposal of reducing Wilson’s plan to limit AFDC grants to families migrating to California from states where benefits are lower.

“To the extent they come to California and try to get the benefits of California welfare, yes, we have to deal with that,” he said of interstate immigrants. “It is a cost we cannot afford.” He said dealing with foreign immigrants raises more complex questions.

Briefly, these are other issues awaiting action:

SCHOOLS: Wilson is known to have decided not to seek suspension of Proposition 98, the voter-approved law that assures public schools about 40% of the state’s general operations budget. Wilson might even propose a 2% to 3% increase in basic support for schools. But the governor might take some of that money back by proposing an accounting change that could shave $900 million from what the schools would otherwise receive to keep pace with increasing enrollments and inflation.

HEALTH: Speaker Brown and the GOP’s Maddy are expected to try to draft a compromise program for Californians who lack health insurance coverage. Both support the concept of requiring businesses to provide insurance for their employees. But because of fiscal constraints, a state-required insurance program likely will have to be phased in over several years.

AUTOMOBILE INSURANCE: Since last summer, a legislative committee has sought to fashion a plan that would get the long-stalled overhaul of auto insurance off dead center. Prospects of reaching a compromise seem elusive, as long as the trial lawyers lobby and insurance industry remain polarized over no-fault insurance. Under no-fault, a driver’s insurance company would pay the costs from an accident, regardless of who is at fault. This system also would prohibit lawsuits in cases where damages fell below a certain monetary level, a feature fiercely opposed by trial lawyers. Wilson supports no-fault, as does Insurance Commissioner John Garamendi, a recent convert.

TIMBER: The governor, who received heavy criticism for vetoing the Legislature’s forest protection bill last year, is advancing a proposed compromise aimed at protecting both the economically hard-hit lumber industry and vast tracts of privately owned timber.