Negotiators Try to Forge Budget Deal : Government: Wilson and top legislators appeared to be headed for consensus on many issues, including property tax shift. A snag on school funding could squelch any compromise, Brown says.

Gov. Pete Wilson and legislative leaders staged a marathon negotiating session Saturday aimed at drafting a compromise state budget that could be put to a vote in both houses of the Legislature tonight.

Wilson met with the Democratic and Republican leaders of the Assembly and Senate from morning until late into the night amid hopeful signs that they were reaching a consensus on issues ranging from prison spending to local government finance.

Today is the Legislature’s self-imposed deadline for extending a temporary half-cent sales tax that is due to expire June 30. State tax collectors have said they need 10 days to notify retailers and instruct them not to reduce the tax rate as scheduled.

The five leaders, with the possible exception of Senate President Pro Tem David A. Roberti (D-Van Nuys), appeared to be in agreement on a $2.6-billion shift of property tax revenues from local governments to schools.

The negotiating group also agreed to restore a $400-million reduction in prison spending that Democrats had wanted but Wilson said he could not accept, aides said.

They hit a snag over school funding but were expected to agree on a plan that would keep education spending at its current level of $4,209 per student. Wilson had wanted to reduce it to $4,187.

Discord on that issue, said Assembly Speaker Willie Brown, could send everything else “down the tubes.”

But Brown said he was confident that a deal could be reached in time for the scheduled sessions of the Assembly and Senate tonight. Administration officials also were hopeful that an agreement was imminent.

“We’re encouraged,” said Dan Schnur, Wilson’s chief spokesman. “We’re going to stay here as long as it takes in order to finish this.”

The negotiations transformed Wilson’s office suite into a series of war rooms, with the leaders encamped in the governor’s Cabinet meeting room and groups of aides from the Administration and the staffs of each of the legislative leaders gathered in various offices, with spreadsheets and reports scattered across the desks.

As each potential point of agreement emerged, aides were summoned to the inner office, where the leaders gave them a broad outline and ordered them to draft the wording of the bills that would implement the tentative accord.

The key to the negotiations was an agreement between Wilson and Brown that the best way to draft a budget that could pass was to shift much of the state’s problems to local governments. Bitter political enemies just a few months ago, they appeared to be in harmony Saturday.

“If the two of them are at odds, they cast quite a shadow,” Schnur said. “When they agree, everyone else seems more willing to set aside their differences.”

It was a disagreement between Wilson and Brown over school funding that triggered last year’s 63-day budget stalemate. Neither seems eager for a repeat of that spectacle, which angered voters and prompted harsh criticism of both men’s leadership abilities.

“At some point, the public is not nearly as concerned about the contents of the budget as they are about the symbol,” Brown said Saturday, paraphrasing a speech one of his members delivered the night the Legislature missed its June 15 constitutional deadline for passing a budget.

Having missed that milestone, Brown is focusing on July 1, the start of the fiscal year. He has concluded that the quickest way to get to 54 votes is to shift much of the state’s problem to local governments.

Brown agrees with Wilson that the best strategy is to transfer property tax revenues from cities, counties and special districts to schools. Every dollar shifted from local governments to schools saves the state a dollar it would otherwise be obligated to spend on education.

Although many Democratic lawmakers have opposed the shift on the grounds that it would devastate local government services, Brown says now that much of that opposition was based on a misunderstanding.

The biggest problem with the governor’s plan, the Speaker said, was that Wilson had not explained it well enough.

“The governor has a marketing problem,” Brown said in an interview.

Although the proposal had been widely portrayed as a $2.6-billion tax shift, Brown noted that the net effect could be whittled down by giving counties the half-cent sales tax, relieving them of state-ordered obligations, and spreading the burden to cities and special districts.

State Budget Watch

Twelve days before the end of the fiscal year, the constitutional deadline for enacting a new state budget, there were these key developments in Sacramento:

THE PROBLEM: The state will end the year with a $2.9- billion deficit and faces a $9-billion gap between anticipated tax revenues and the amount needed to pay off the deficit and provide all state services at their current levels for another 12 months.

THE LEGISLATURE: The Assembly-Senate conference committee on the budget did not meet.

GOV. PETE WILSON: Wilson met for a second day with Senate and Assembly leaders. The leaders were in near-agreement on a plan to shift $2.6 billion in property tax revenues away from local governments but still were seeking consensus on issues involving school finance.

KEY DEVELOPMENTS: The Assembly and Senate scheduled floor sessions for tonight, poised to take up the 1993-94 budget bills if an accord is reached by legislative leaders and the governor.