IOU a Real Budget Solution : Wilson and Assembly need to compromise

As California’s chief executive, Pete Wilson had a special responsibility to make sure that a state budget agreement was reached by the Tuesday midnight deadline. Try as he might to portray the Democrat-controlled Legislature as the sole cause in the failure to adopt a budget, the Republican governor must shoulder some blame.

Perhaps the impasse is not so much a matter of personalities as of the partisanship that divides the governor from the Democrats. But work together they must, for the good of the state. So far, Wilson seems to be doing better at playing politics.

The governor took a hard line as Democrats made many concessions. In the closing hours of negotiations, for example, most Democrats gave up trying to persuade Wilson to approve tax hikes or to finance over two years at least part of the $3.8-billion deficit incurred in fiscal 1991-92.

But Assembly Democrats drew the line on education; Wilson wanted to cut $2 billion; they would go for only $605 million. They offered a number of proposals, some of them smacking of gimmickry. The governor wouldn’t deal.

In all, the state must find $10.7 billion to close the gap between projected revenues and money needed to pay its bills, restore a reserve and get rid of this year’s deficit.

The irony of the quarrel over the schools is that now education has the upper hand. Because no agreement was reached by the constitutional deadline, Proposition 98, the 1988 school funding guarantee measure, assures schools of keeping $1.1 billion that the state says was overpaid in 1991-92, plus a similar amount this year. (That’s the $2 billion or so everyone has been fighting over.) In a budget crisis of this magnitude, schools must take their share of cuts, unless health, welfare and higher education are to be cut even deeper. But $2 billion?

What now? State Controller Gray Davis is ready to issue registered warrants--essentially IOUs--to pay the state’s bills. Meanwhile, the state’s credit rating is in danger.

Wilson, in a press conference Wednesday, excoriated Assembly Democrats for failing to pass the schools cuts he wanted--as Senate Democrats finally did in an effort to at least have some budget in place by the deadline. The governor also did a strange thing: He presented his detailed, 510-page budget proposal--something he should have done weeks ago.