Budget: It’s Not a Pretty Picture : Wilson has first crack at pulling the state through ’93

Like the pieces of an intricate puzzle, the components of Gov. Pete Wilson’s newly unveiled 1993-94 state budget fit together to create a picture. One way to see the picture is as a delicate fiscal balancing act dependent on steep spending cuts. Another is as a countdown to the governor’s race next year. Both views have some truth to them.

In his first go at the budget, Wilson has left himself plenty of room for maneuvering, reflecting hard-core fiscal necessity and political horse sense. That should give credence to the conciliatory tone of his recent State of the State address--if Wilson and the Legislature do indeed work creatively on the budget.

The outlook for Wilson’s $51.2-billion budget proposal is not pretty. It includes a $2.1-billion carry-over of a deficit from last year and steep cuts in state health, welfare and higher-education programs. Under the plan, cities, counties and special districts could lose billions. Primary and secondary education, along with prisons, were spared the budget knife.

Three elements could eventually remake the state budget picture:

Will the Feds Deliver? Much of the governor’s budget is predicated on President-elect Bill Clinton heeding Wilson’s call for a huge infusion of federal cash. The governor is banking on the new Administration providing $1.45 billion to California for the cost of services attributed to immigration. Funds due to California under current law amount to only $575 million. If the federal funding is not committed by May 15, Wilson has to go back to the drawing board. Let’s hope the state’s oft-divided delegation--the largest in Congress--will be assertive in pressing California’s case.

* Sales Tax Choice. In sticking to his State of the State promise of no new taxes, Wilson wants the half-cent sales tax to expire as scheduled June 30. If it does, the state would lose $1.5 billion in the next fiscal year. If the requested federal funds fall through, extending the sales tax--which the Democrats favor--would offset the shortfall. The levy would also avoid the need for about $1 billion in cuts in already-trimmed health and welfare services and in higher education.

* Proposition 13. After the property tax initiative was passed in 1978, the state bailed out local governments by shifting property tax revenues from schools to cities, counties and special district for services ranging from fire protection to flood control. In order to avoid cuts in K-12 education, Wilson proposes rerouting these local government funds--$2.6 billion--to schools. He maintains that most local governments will not have to ask voters to increase sales tax by up to a penny for services threatened by the cutbacks. But that belief is a matter of considerable debate.

To strip localities suddenly would be traumatic. By contrast, a multi-year plan to wean localities off the money would provide for a smoother transition. Even then, the state Constitution would need to be amended to permit a simple majority rather a two-thirds vote for local entities to be able to enact certain financing measures.

This is not the final word on the state budget, of course. The powerful Democrat Willie Brown, Assembly Speaker, will have his say. So will the economy, which will unquestionably play a large role in next year’s gubernatorial race. Some legislators are raising the option of a two-year budget--in effect a wager that things will get better in 1994. Under the circumstances, almost nothing should be ruled out yet.