Wilson-Brown Feud Heats Up : Budget: While they trade charges, two other officials warn that fiscal conditions are worsening and that the state may have to issue IOUs to pay the bills.

Republican Gov. Pete Wilson and Democratic Assembly Speaker Willie Brown showed no signs Tuesday of calling a truce in their war of words, with each accusing the other of ducking the tough decisions needed to balance the state budget.

Wilson, speaking to members of the California Chamber of Commerce, said Brown’s plan to balance the budget without a major tax increase was nothing but “hypocrisy and deception.” The governor derided Brown and his Assembly Democrats for failing to detail to his satisfaction more than $2 billion in budget reductions called for in their plan.

Brown responded, in essence, by telling Wilson to put up or shut up.

While the two leaders feuded, Controller Gray Davis and Treasurer Kathleen Brown issued separate statements warning that the state’s fiscal condition was worsening and could lead to the issuance of registered warrants--or IOUs--to pay the state’s bills.

Wilson and Brown, arguably the two most powerful political figures in California, have seen their relationship grow increasingly bitter since joining forces last summer to wipe out a $14.3-billion budget shortfall.

After that alliance, the two split over the redrawing of political district lines, timber regulation, and other issues, and Wilson has made Brown a focus of his speeches ever since.

On Tuesday, Wilson continued his attack, inserting into his previously written speech several paragraphs of scathing criticism of a $60.3-billion spending plan passed Monday by the Assembly Ways and Means Committee. The Democratic budget is balanced with 6% across-the-board cuts in almost all state programs except education and welfare, and the legislative package includes a bill by Brown that would allow the governor, if needed, to make an additional $2 billion in budget cuts.

The plan could lead to 18% cuts in higher education, prisons, aid to local government and other programs. The state’s biggest welfare program, Aid to Families with Dependent Children, would be cut 4.5% under the worst-case scenario.

Wilson and his aides argue that the 18% cuts could not be made without additional legislation relieving some departments of responsibilities they have under state law. And the governor said he doesn’t trust the Democrats to deliver those measures, because they reneged on similar agreements made a year ago.

Brown, speaking to reporters a short time later at the Capitol, said lawmakers would be “micro-managing” state government if they spelled out where every cut should be made.

Brown pointed out that the budget Wilson proposed in January is now at least $2 billion out of balance, because of declining tax revenues, and that the governor has offered no suggestions for how to make it work.

He added: “The governor may disagree with those, and if he does disagree, he should step up to the plate and tell us what the alternatives are.”

Controller Davis, meanwhile, said Tuesday that the state ended the last fiscal year with a record $1.32-billion deficit and is headed for a shortfall two or three times that in the year ending June 30. Treasurer Brown, in a separate statement and a letter to Wilson, agreed and said cash reserves were getting so low that the state may have to pay its bills with IOUs.