Furious Honig Threatens to Go to Court : Education: The state superintendent blasts the budget deal. He says the governor is using the schools as his insurance policy in the event the recession doesn’t let up.

Furious with the governor for “using the schools as his insurance policy” if the recession does not let up, state schools chief Bill Honig on Wednesday blasted the newly struck budget deal that erodes education spending and said he is considering going to court to overturn a key part of it.

Honig’s disappointment with how schools fared in this year’s historic budget battle was echoed by other segments of California’s vast public education system, from elementary schools to the University of California. But some expressed relief that the cuts were not worse, given the state’s $10.8-billion budget gap and the deep cuts rendered to local governments, health and welfare programs.

“It has been a difficult battle, and we didn’t win,” Barbara Howard of the California School Employees Assn. said at a Capitol news conference Wednesday. “But we are a whole lot better off than we would have been had everyone given up and closed down last June.”

Over the course of the summer-long budget fight, Wilson dropped several proposals, including a plan to keep children with late birthdays out of kindergarten for a year.

Officials late in the day still were sorting out the details of how the complicated budget settlement will affect elementary and secondary schools, community colleges, the California State University system and UC. But in general, the budget will result in:

* For the state’s two enormous university systems, higher student fees--24% at UC and 40% at Cal State--and a myriad of cuts in services. UC officials warned that additional fee hikes may be enacted soon for the current school year. But at least for the fall semester, layoffs of tenured faculty were avoided at both systems. The budget reduces general revenue funds by 8.8% for Cal State and about 11% for UC, which relies much less on state funds.

* A drop of 15% per student in Cal Grants, the largest group of state-funded financial aid. It is uncertain whether universities will make up the difference in scholarships.

* Fee increases to $10 per unit, with no maximum, for most community college students, up from the current $6 per unit. For the estimated 124,000 students who already have bachelor’s degrees, the fee will rise to $50 per unit except for those on welfare or seeking job retraining. The increases will take effect Jan. 1.

* No change in the per-pupil amount--$4,185 in state and local funds--for elementary and secondary students; also, a 2% cut--approximately $100 million--in specialized funds, such as those provided for gifted students, special education and some transportation services.

Adding to the uncertainty, Wilson on Wednesday used his line-item veto authority to delete $425 million in basic, per-student aid for general education. Administration officials said Wilson had to set that money aside because of a technical problem with some of the legislation and promised to restore the money in January if the Legislature takes care of the problem when it reconvenes.

While the state’s 107 community colleges received up to $100 million more to accommodate growing numbers of students, both the colleges and the kindergarten-through-12th-grade systems will be required to give back some of last year’s and this year’s funding over the next two fiscal years. This is part of Wilson’s insistence on slowing the growth in school spending in order to keep the recession-plagued state in the black.

To do so, the state plans to take back part of the money that schools got last year under Proposition 98, a voter-approved measure that guarantees a minimum proportion of the state revenues for kindergarten through community colleges. The take-back also will have the effect of reducing future spending because the base on which the amount is calculated will have shrunk. To discourage a lawsuit over the take-back plan, Wilson included a so-called “poison pill” provision that will suspend the funding guarantees of Proposition 98 should a legal challenge to Wilson’s method prevail.

“This is an out-and-out way to try to nullify the minimum guarantees of Proposition 98,” Honig said in an interview. “Pete Wilson is trying to thwart the will of the voters. . . . I don’t believe the people will stand for it once they realize what has happened,” added Honig, who said his staff is considering a legal challenge despite the poison pill.

Further, by keeping per-pupil spending the same over a three-year period, the governor is in reality forcing the schools to go backward because they cannot keep pace with rising costs in such areas as utilities, insurance, supplies and employee benefits, Honig said.

For most local school districts, the budget deal means they at least will not have to cut deeper into this year’s spending packages, although they are likely to have increasing difficulty keeping pace with inflation and student enrollment growth in the following years, local officials said.

Los Angeles Unified School District officials said their staff will need several days to sort out the state package but feared deeper cuts in district spending this year. The district already has cut $400 million from its current budget, more than half of which is to come from still-to-be-negotiated employee pay cuts.

David Mertes, chancellor of the California Community Colleges, expressed frustration over the long budget process and said the fee increase--which was supported by some college officials--will discourage many students.

“Many of our students are working at entry-level jobs and have families to support. Four dollars a unit means $40 a semester more, and for many that is too much.”

UC officials warned that another fee hike for the current school year, on top of the 24%, may be debated at the October meeting of the UC Board of Regents. Enrollment cuts and faculty layoffs loom for the following few years. “Nothing has been ruled in or ruled out,” said Larry Hershman, budget director for the nine-campus UC system. The 24% rise brings average yearly fees for UC undergraduates from California to $3,036, not including room and board.

The $1.88 billion in general revenue funds given to UC is $224 million less than last year and $450 million less than what the UC regents requested. “I think it’s very bad, it’s a crisis,” said Hershman. He declined, however, to respond to questions of whether UC was being punished for recent allegations by the state auditor general about waste and overspending by UC executives.

UC enrollment last fall was about 166,000, a figure that could drop by 15,000 over the next few years as the university moves to restrict admissions, Hershman warned. He also said he was “not very optimistic” about the prospect for building a 10th UC campus, somewhere in the San Joaquin Valley, in the next few years.

The volatile question of widespread faculty and staff layoffs depends on how many UC employees take part in early retirement programs and a voluntary plan to reduce work-hours. UC officials said they will do their best to protect the number of undergraduate classes.

The 20-campus Cal State system had planned for an 8% drop in its general revenue funds from the state. The actual $1.51-billion appropriation represents an 8.8% decline, close enough to expectations that painful class and faculty cuts in place for the fall will not have to be deepened, Cal State system chancellor Barry Munitz reported Wednesday.

“It’s a disastrous budget, but it could have been worse,” Munitz said. However, he and other Cal State officials warned that the spring terms could bring more troubles, particularly as campuses are torn between providing financial aid or offering classes. While most layoffs of tenured Cal State faculty were rescinded for the fall, no guarantees about that were offered for the spring.

The 40% fee increase helped restore a large number of Cal State classes. Still, the number of fall courses throughout the Cal State system is expected to drop to about 50,000, down about 1,500 from last year and about 6,500 from the fall of 1990, officials said. Meanwhile, enrollment is expected to decline by about 10,000 from last fall, to a total of 352,000.

Including the 40% fee increase, basic Cal State student fees will average $1,308 for the current school year.

Contributing to this report were Times staff writers Dan Morain in Sacramento and Charisse Jones in Los Angeles.