Wilson Offers Plan to Close Budget Gap : Spending: Governor repackages previous ideas and details a new twist on controversial school funding. He challenges the Legislature to act on the proposal.

Gov. Pete Wilson, hoping to force Democratic lawmakers to choose between cutting welfare and slicing more deeply into public schools or local governments, Friday offered his latest plan for closing the state’s budget gap and challenged the Legislature to act on it.

Wilson’s plan--the third he has proposed this year--would cut more from education and social programs and less from local governments and prisons than a recent Republican-authored compromise backed by Democrats and some GOP lawmakers.

“Enough is enough,” Wilson said at a Capitol news conference as the state passed its 45th day without a spending plan. “It is time to bring the budget hostage crisis to an end.”

Much of Wilson’s proposal amounted to a repackaging of things he has offered before or, in the case of higher education and prisons, a public unveiling of items on which he and the legislative leaders had agreed in private.

Wilson did not relent on his proposal to take back from public schools $1.1 billion they received in the last fiscal year beyond what was required by Proposition 98, the voter-approved constitutional amendment that is supposed to protect education funding.

But the governor added a new twist Friday, proposing to advance the schools enough money this year to keep up with surging enrollments. That money, however, would be deducted from future appropriations the schools are guaranteed under the Constitution.

In June, Wilson aides derided a similar concept as deficit spending when it was floated by Democratic Speaker Willie Brown of San Francisco. But on Friday the governor said it was a legitimate accounting maneuver.

Wilson’s package is expected to go to the floors of the Assembly and Senate on Monday, when it will be debated side by side with the competing proposal crafted by Republican Sen. Frank Hill of Whittier and endorsed by the Assembly-Senate conference committee on the budget. That plan attracted the votes of nearly all Democratic lawmakers but fell short of passage in both houses Sunday because among Republicans, it got the votes only of Hill and one assemblywoman.

Democratic Assemblyman John Vasconcellos of Santa Clara, chairman of the Assembly Ways and Means Committee, called Wilson’s proposal a “public relations ploy” designed to deflect criticism the governor has taken for refusing to negotiate with Democrats.

“There is no compromise here,” Vasconcellos said. “The governor has not given an inch in his commitment to take food from poor kids and education from all kids.”

Other Democratic leaders declined to comment in detail on the latest Wilson plan, saying they would study it over the weekend. But Senate Leader David A. Roberti (D-Van Nuys) said the Legislature is under greater pressure to act now that a federal court decision has ended state payments to doctors and hospitals that care for the poor.

“We really are under an urgency, emergency situation to an extent we have not been until now,” Roberti said.

The first votes next week will be on “trailer bills”--the legislation needed to make the budget work. These bills will include measures on education and local government finance and a constitutional amendment Wilson proposes to encourage all cities and counties in California to give top priority to police and fire services in their budgets.

Wilson’s $40.9-billion general fund proposal--up from his $40.2-billion proposal on July 1 and down from the $43 billion spent in the last fiscal year--includes three elements on which the governor has reached conceptual agreement with legislative leaders: a 5.8% cut in higher education, an 11% reduction in the state bureaucracy, and a prisons budget about the same as last year’s.

The governor’s plan also calls for cuts of 8.9%, or $1.9 billion, in health and welfare programs. Democrats have agreed to most of the reductions but still oppose Wilson’s move to cut welfare grants by up to 25% and eliminate many medical and dental services the state now provides to the poor.

The other major differences Wilson has with the Democrats are on local government and the schools.

Wilson proposes to cut $1.2 billion from local government, including $475 million from counties, $200 million from cities, $100 million from redevelopment agencies and $275 million from special districts. The conference committee plan supported by Democratic leaders would have cut $600 million more.

On education, Wilson has backed away from his July proposal to virtually freeze school spending from last year to this year. Instead, Wilson proposes to spend $24.2 billion in state and local funds, an increase of $572 million, or 2.4%, from the fiscal year that ended June 30.

For kindergarten through 12th grade, Wilson’s budget would be almost identical to the one advanced by Hill and supported by Democrats. Both leave funding within a few dollars of the $4,185 per pupil spent in the last fiscal year.

But Wilson’s proposal involves complicated transfers of funds across fiscal years, including an advance to the schools this year of $732 million that they would have to deduct from what they are due to receive from the state in the next two years. Altogether, the provisions mean that the schools would lose an estimated $900 million from what they otherwise would be entitled to receive in each of the next two years.

State Supt. of Public Instruction Bill Honig predicted that Wilson’s proposal will fail in the Legislature. He said the schools proposal amounts to a rollover of the state’s deficit--which Wilson said he would not allow--because it would allow the state to spend more this year than it expects to receive from taxpayers.

“He’s basically bargaining this year for next year’s balance sheet,” Honig said. “I don’t know why that should be part of these negotiations.”

Honig also criticized Wilson’s proposal to shift community college funds to primary and secondary schools. The governor’s latest proposal reduces funding for two-year colleges by $178 million--7% less than the budget for the fiscal year that ended June 30. The cut is $453 million, or 17%, less than Wilson proposed in his original budget last January.

To make up some of the difference, the governor wants to more than triple most student fees from $6 to $20 per unit, with a $200 semester maximum.

Those who have accumulated 90 units or more--about 10% of the 1.2 million credit-earning community college students--would pay up to $112 per unit, which is the calculated full cost of instruction.

Community colleges Chancellor David Mertes said Wilson’s proposal penalizes community college students to keep other parts of state government afloat.

“If there are to be fee increases in community colleges, and there may have to be, we would like those dollars to remain in the system so we can put in classes for students who currently are being turned away,” Mertes said.

Mertes said the proposal to charge students who have 90 or more units the full cost of instruction would push costs for a community college student taking a full course load to $3,400 a year, more than the cost of attending a University of California campus.

“This would impact substantially on our ability to work with students who are coming to us to upgrade their skills, new immigrant students and re-entry women who are coming back but must take certain basic courses to get them up to college level,” the chancellor said.

Mertes said that he argued these points in a meeting with the governor Friday afternoon and that Wilson “listened and said he understood the problem” but made no move to change the proposals.

Times staff writers Carl Ingram and William Trombley contributed to this story.