Democrats and Unions Lead Prop. 165 Fight : Initiative: The two groups are the biggest donors against measure that would give Wilson new budget-slashing authority and reduce aid to the poor. Backers of plan are ahead in fund raising.

The state Democratic Party has joined the state’s biggest public employee unions by donating $479,000 in the last three months to defeat Gov. Pete Wilson’s ballot initiative, Proposition 165, according to a report filed with the secretary of state and made available Tuesday.

In a campaign dominated by labor money, the Democratic State Central Committee donation is the biggest single contribution against the Wilson measure, which would reduce welfare benefits and give the governor new powers to control state spending.

For his part, the Republican governor, who has staked his political reputation on passage of the measure, dipped into his own campaign treasury to make $535,000 in interest-free loans to the Yes on Proposition 165 committee between July and September.

Wilson was sharply criticized earlier this year because so much of the proponents’ money came from major corporations and top executives.

But in the latest three-month reporting period there were relatively few sizable corporate contributions. The largest was $9,500 from Safeway supermarkets.

The Democrats, in joining the battle against Proposition 165, are targeting the GOP governor as much as initiative.

“We saw this as an opportunity to stop Pete Wilson from his power grab,” said Bob Mulholland, political director for the state Democratic Party. The initiative and Wilson’s leadership of President Bush’s reelection campaign in California are “a test of Pete Wilson’s political survivability in the state,” said Mulholland, who predicted that Bush and the ballot measure will be defeated in California.

The committee campaigning against Proposition 165, called Taxpayers Against Deception, reported raising $1,639,000 during the three months ending Sept. 30.

The opposition campaign continues to draw most of its support from public employee unions, whose members could be directly affected by the governor’s new budget-slashing powers as proposed in the initiative.

The committee reported collecting $409,767 from the California State Employees Assn. since the beginning of the year, $179,869 from the California State Council of Service Employees, $135,149 from the California Teachers Assn. and $100,000 from the California Assn. of Highway Patrolmen.

The Wilson-run Proposition 165 committee, United California Taxpayers, reported raising $1,261,472 from July through September, with much of the money coming from contributions of $100 or less, campaign spokeswoman Amy Albright said.

Since the beginning of the year, the Proposition 165 committee has raised significantly more than the opposition--$2.6 million compared to $1.7 million for the proposition’s opponents. Both sides have spent heavily on broadcast advertising.

“Unlike the groups who are fighting this initiative, our campaign has the backing of tens of thousands of individuals from all walks of life,” said “Yes on 165” campaign director George Gorton.

Proposition 165 is a two-part initiative that would give the governor broad emergency powers to cut state-funded programs when estimates show that expenditures exceed revenues or when the Legislature and governor cannot reach agreement on a new budget at the end of a fiscal year.

The measure also would sharply drop grants given primarily to poor mothers and children through Aid to Families With Dependent Children.