Senate Leaders Reach Budget Deal : Finances: Plan cuts deeply into local governments, health and welfare programs. Schools would be spared this year, but Wilson wins limits on future spending.

Democratic and Republican leaders in the state Senate reached agreement Friday on a bipartisan budget package that would cut deeply into local government and health and welfare programs while sparing the public schools--at least for this year.

The deal, expected to be brought up for a vote early this morning, would guarantee the schools the same dollars per student this fiscal year as they got last year. But it contained a key element that Gov. Pete Wilson has demanded be part of any budget solution: a provision to reduce the anticipated growth in school funding over the next several years.

Other than limiting future school funding, the agreement’s major points were in many ways similar to Democrat-backed plans that were on the negotiating table when the state’s historic budget stalemate began 60 days ago.

Administration sources said Wilson was likely to sign the budget and the related legislation if the Legislature approves it in the form negotiated by Senate leaders. It was not clear what fate the bills would face in the Assembly after clearing the Senate, but there have been indications this week that Assembly Democrats are prepared to acquiesce to the Senate deal.

“What we are shooting for in this deal is the best reflection of Democrats’ ideals within the realities of this governor and this legislative process,” said Senate Democratic floor leader Barry Keene of Ukiah, referring to the fact that no budget can pass without Republican votes.

Keene added: “It’s as imperfect as one can imagine. But it’s the best we can do under the circumstances.”

Keene’s assessment was echoed by Senate GOP Leader Ken Maddy of Fresno, a moderate who moved to the right this year to stand in solidarity with Wilson in the hope of fashioning a solution that would end the state’s recurring budget crises.

During the past week, as Maddy negotiated almost round the clock with Senate Leader David A. Roberti (D-Van Nuys), he kept Wilson informed of the discussions. But Maddy said in the end he made his own judgments about the best deal he could hope to obtain.

“If this thing passes, I’m going to try to sell the governor on it,” Maddy said.

The Senators began voting on pieces of the budget package near midnight and vowed to stay in their chamber until they could take a vote on the $58-billion spending plan itself. Roberti said that one reason for the late hour was his hope that the members by then would be too weary to fight.

“I’m betting on my allies--exhaustion and depression,” Roberti said. “By Sunday it will be terror.”

Roberti said the Democrats’ concessions to the governor were matched by compromises to which Maddy agreed in the belief that Wilson would accept them.

“Every issue was debated,” Roberti said. “He got something and we got something. It’s more his budget than ours. That’s part of the reality.”

The key to the Senate deal was its treatment of public education. The agreement would give Wilson his proposal to refigure the Proposition 98 guarantee from last year, making it appear on the books as if the schools had never received $1 billion they got in excess of what they were guaranteed by the voter-approved constitutional amendment.

The accounting change is crucial because it allows the state to give schools between $1 billion and $2 billion less a year in the future compared to what they would otherwise be guaranteed by Proposition 98. Under law, state and local taxpayer support for schools would grow to $29.3 billion by 1995. The Senate plan would leave them $2 billion short of that mark.

“This is just a tricky way of lowering what the schools get over the next few years,” said state Supt. of Public Instruction Bill Honig, who has led the opposition to Wilson’s proposal.

Roberti went along with the long-term cut only after Republicans agreed to advance the schools about $900 million from money they are guaranteed in the future. The loan would ensure that kindergarten-through-12th-grade schools get the same dollars per pupil this year that they got a year ago, although that money will be eroded by inflation.

In another last-minute concession, Maddy agreed to provisions to soften the blow on community colleges. Rather than more than triple community college fees, as Wilson proposed, the Senate plan would double them, from $6 to $12 per unit. And a Wilson proposal to end taxpayer support for students with more than three years of credits was rejected in favor of an alternative to charge higher fees to students with bachelor’s degrees who return to community college for further study.

Included in the compromise were $1.3 billion in cuts in state aid to local governments--reductions of $550 million for counties, $195 million for cities, $120 million for redevelopment agencies and $430 million for special districts. That shift falls between the $932 million that Wilson was seeking two months ago and the $1.7-billion cut Democrats had proposed. Just before midnight, the Senate passed a bill implementing these cuts on a 30-8 vote.

The Senate plan would cut about $1.7 billion from health and welfare programs. But the negotiators at the last minute rejected one of Wilson’s key proposals--to eliminate adult dental care and other services for poor adults that the state offers but which are not required by the federal government. Instead, the deal would save a similar amount of money by withholding from the aged, blind and disabled a cost-of-living increase they otherwise would have received Jan. 1.

That blow would be on top of a 5.8% cut in the so-called SSI-SSP grant that was included in the compromise plan.

The plan also would reduce welfare grants under the Aid to Families With Dependent Children program by an average 5.8%. The depth of the reduction would vary by region, with some families losing as much as 7.5%, depending on the cost of living.

The Senate approved legislation implementing the health and welfare cuts on a 28-9 vote.

“Everyone is going to feel the pain,” said Sen. Mike Thompson (D-St. Helena), who helped craft the welfare provisions. “The more you depend on government, the more you’re going to feel the pain. If you’re a kid on AFDC, you depend on government not only for your education but for your health care and the essentials of life. All of that is going to be cut.”

The budget deal also would cut deeply into state support for higher education programs. Part of the blow would be absorbed by a 24% tuition increase at the University of California and 40% at the California State University campuses.

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