NEWS ANALYSIS : Wilson Gambles as He Plays Budget Roulette

As Gov. Pete Wilson launches a statewide media blitz to win support for his proposal to balance the budget with deep cuts in health, education and welfare programs, he says he is prepared to drive state government into chaos rather than yield to the Democratic lawmakers who stand in his way.

What a difference a year makes.

Last year, his first in office, Wilson was the toast of the town as he courted Democratic leaders, offered compromises, and negotiated his way to a plan that was supposed to use a combination of spending cuts and tax increases to erase a record $14-billion budget shortfall.

But that bipartisan program failed when the economy remained in the doldrums and tax revenues fell. Now the state faces a $10.7-billion gap between revenues and anticipated expenditures.

This time, Wilson says, it will be his way or no way at all. Refusing to budge from positions he staked out in January, Wilson was at an impasse Friday with Democratic leaders with no progress in sight.

Many Democrats believe that he is bluffing. If he is not, the Capitol may be in for a summer siege that could disrupt state and local services and the lives of millions of Californians.

“I don’t believe that this governor or any governor holding on to his right senses would want to see his state . . . shut down,” Assembly Speaker Willie Brown (D-San Francisco) said Friday. “I can’t believe anybody with any modicum of rationality about himself would be pursuing that course of action.”

Wilson has rejected a Democratic plan that would reduce state spending from $44 billion this year to $42 billion next year but soften the blow on some programs by raising taxes and spreading repayment of the deficit over two years.

Although he has yet to offer a detailed, balanced budget with specific cuts in programs, Wilson has said the state must erase the deficit in one year with spending cuts alone. Among other things, that could mean a $200-per-student reduction in funding for public schools, cuts of $150 in monthly grants to poor mothers and their children, and the elimination of state-paid medical care for the working poor whose catastrophic illnesses threaten to bankrupt them.

To prevail, Wilson says, he is prepared to go beyond the end of the fiscal year Tuesday. If no budget is in place by then, the state will run out of cash July 1 and begin to pay its bills with IOUs.

Wilson says he is willing to wait until November, when voters will pass judgment on an initiative he has placed on the ballot to cut welfare grants and give the governor new powers to cut spending when he reaches an impasse with the Legislature. The same ballot will contain an initiative, which Wilson opposes, to raise taxes on business and the wealthy.

“This election will be a great referendum on a fundamental difference in philosophy,” Wilson told reporters Wednesday.

On Thursday, Wilson delivered a partisan, eight-minute address carried live by 35 television stations around the state. On Friday, he taped appearances on several more public affairs shows and went on the air with KABC radio talk show host Michael Jackson. He had several more television interviews scheduled for today.

Although Wilson insists that he will wait as long as it takes for the Democrats to capitulate, no one knows how much disruption a months-long stalemate would cause.

“If chaos comes, everyone will suffer,” Wilson acknowledged Thursday night.

The California Constitution requires the state to make regular payments to schools and universities, and to pay service on bonded indebtedness, the status of the budget notwithstanding. And the courts have ruled that certain other payments--such as to the counties for Aid to Families With Dependent Children--must go out on time.

Beyond that, said Finance Department spokeswoman Cynthia Katz, “we’re in uncharted waters.”

Most state workers are due to be paid at the end of July. If they do not get their paychecks for that month, or the month after, entire departments of government could shut down.

Whatever the disruption, pressure will build to resolve the stalemate with compromise, and that pressure will be greatest on the governor.

There are 120 legislators, and except perhaps for the leaders of the Assembly and Senate, few are known outside their districts. Many are not even known there. But the governor is known widely, and he is elected to represent everyone in the state--not just those who agree with him.

Wilson felt that heat a year ago after insisting that he would not sign the budget unless he also got an overhaul of the state workers’ compensation system. The governor held up the budget for two weeks but then blinked, acknowledging that he lacked the votes and that the state had to get on with its business.

As a result, many Democrats believe that he is bluffing again.

But Dan Schnur, Wilson’s communications director, insists that the governor will not retreat. Wilson has met with leaders of half a dozen Republican grass-roots organizations and given them a list of 27 Democrats in the Assembly and 11 in the Senate, plus two independents, he believes might vote for his budget if enough pressure is applied.

“The longer the summer goes on, the more the pressure will mount for action,” Schnur said. “Eventually, one by one, the Democrats in the Legislature are going to come to terms with this. When enough of them do, we’ll have a budget.”

Even if the Democrats do not believe him yet, Wilson seems to have persuaded his harshest critics--conservative Republicans in the Assembly--that he means business.

GOP Assemblyman Tom McClintock of Thousand Oaks, who has battered Wilson time and again for backing tax increases a year ago, said Friday he believes that Wilson intends to stand firm no matter how long the deadlock lasts.

“He’s as resolute and determined this year as he was irresolute and feckless last year,” McClintock said after Republican lawmakers met with the governor.

McClintock and other conservatives say that Wilson, having launched such a public offensive on the budget, cannot afford to back down now. If he did, whatever credibility he has remaining with the Legislature and the voters would be lost, they said.

“I think he’s crossed the Rubicon,” said Republican Assemblyman Pat Nolan of Glendale. “The die is cast.”