Wilson, Leaders Seek Statewide Sales Tax Vote : Budget: The bipartisan compromise plan is sent to the Legislature for action. It would shift $2.6 billion in property taxes from cities and counties to schools.

Gov. Pete Wilson and legislative leaders crafted a compromise spending plan Sunday that would cut state services, shift a quarter of local government’s property tax revenue to the schools and trigger a statewide vote in November on whether to make permanent a temporary half-cent surcharge on the sales tax.

Wilson and the Democratic and Republican leaders in the Assembly and Senate disclosed the plan as they emerged from nearly 20 hours of closed-door negotiations spread over two days.

They said no one liked the plan but each agreed it was the best the state could do under the circumstances.

“This was a wise and good compromise,” Wilson said. “Not everyone is going to be happy. In fact, there’s something to make all of us unhappy. It is that kind of a thing. We are stretching resources and they just don’t stretch quite far enough. But essentially, I think it has been an equitable distribution.”

Assembly Speaker Willie Brown (D-San Francisco) said there was not much in the budget for the people he represents.

“My constituents are getting a budget that operates the state with the meager resources the state has for the next 12 months,” he said.

Orange County would fare much better than most counties under the budget proposal that emerged Sunday. Under the proposed property tax shift, $8.4 million would be taken from county government to help fund schools, far less than officials originally feared might be funneled away.

The totals assume that voters agree to make the half-cent sales tax permanent.

Under budget proposals that emerged earlier in the spring, Orange County government, including special districts, stood to lose in excess of $200 million.

“A preliminary review would indicate Orange County will be hit the least of any of the large counties,” said state. Sen. Marian Bergeson (R-Newport Beach). “Under this scenario, we should fare relatively well.”

But Bergeson also expressed concern that if the budget isn’t passed in the next day or so, it could spell trouble for Orange County.

Any delays would give some of the state’s larger counties, which stand to be hit hardest, a chance to push through a funding formula that would shift the economic burden away from them and onto regions such as Orange County, she said.

While the county was getting relatively good news, the budget still contained a fair dose of fiscal misfortune for some of the region’s cities. Huntington Beach, for instance, stood to lose $1.9 million as a result of the property tax shift, while Santa Ana would lose $1.8 million and Anaheim $1 million, according to figures issued by Senate staff.

If the compromise survives, it will keep law enforcement on an even keel, said Orange County Sheriff Brad Gates, who has spent much of the past three weeks in Sacramento lobbying lawmakers.

Extension of the half-cent sales tax through the end of the year would provide law enforcement with about the same funding as it received last year, he said.

Gates also said he would campaign for voters’ approval of an extension of the half-cent sales tax if it is put before them later this year. “If it doesn’t pass in November, we’re going to have the same kind of mess once again next year,” he said.

The centerpiece of the state budget plan is a $2.6-billion shift of property tax revenue from cities, counties and special districts to the schools. Every dollar transferred from local government to education saves the state a dollar it would otherwise have to give the schools from its own treasury.

To help local government survive that loss of revenue, the leaders proposed extending the state’s half-cent sales tax surcharge through the end of the year and shifting the $700 million it would raise to counties. In November, at a statewide special election, voters would be asked to make the tax permanent and dedicate its revenue to law enforcement and other public safety programs.

The ballot measure would be a constitutional amendment designed to circumvent voter-approved Proposition 98, which would require that the lion’s share of the sales tax revenue go to schools. A majority vote would be needed for passage.

Wilson originally wanted the sales tax to expire on schedule June 30. He later agreed to extend it for six months but said the November vote would have to be on a county-by-county basis to expand local control over taxes and spending. In the end, he agreed to a statewide vote but insisted that the money go to local government.

Wilson had wanted deeper cuts in health, welfare and higher education programs than he settled for. But he won restoration of $400 million in prison spending that lawmakers had wanted to delete from his budget.

The proposed $52-billion spending plan would cut grants to the poor, aged, blind and disabled by 2.7% and suspend the renters tax credit. Higher education would get about $150 million more than Wilson proposed, which legislators want to use to allow for smaller fee increases than the University of California and the California State University had planned.

Community college fees would rise from $10 a unit to $15 over two years but would be capped at $300 a year.

Primary and secondary schools would get about the same amount as they spent this year, about $4,200 per student in state and local funds.

Lobbyists for various interest groups swarmed outside the governor’s office as the leaders disclosed details of the plan, then moved quickly to positions outside the Assembly and Senate chambers, where they hoped to persuade rank-and-file lawmakers to turn it down.

The Assembly planned to vote on at least some pieces of the multi-bill legislative package Sunday night. Wilson paid a rare visit to the Assembly chambers to lobby Republicans in a private caucus to vote for the plan.

The most vociferous opposition was coming from representatives of California counties, which oppose the transfer of $2.6 billion in local property tax revenue to the schools.

County officials said they fear that their services would be hurt even if the voters extend the half-cent sales tax surcharge and the revenue raised is given to local government. Should voters reject the measure, counties say, their programs will be devastated.

“There are other ways to do this without taking it from the hide of cities and counties,” said Ed Edelman, chairman of the Los Angeles County Board of Supervisors, who was in the Capitol to lobby the county’s legislative delegation.

Yet there was disagreement among Los Angeles County law enforcement officials about how the plan would affect their services.

“Law enforcement in Los Angeles fares well,” said Dist. Atty. Gil Garcetti. He said that if the sales tax extension passes, law enforcement would be guaranteed no less money than they spent in the 1992-93 fiscal year.

“The governor and the Speaker have both delivered as they said they would,” he said.

But Sheriff Sherman Block said the final leadership plan, compared to earlier versions, was “the difference between devastating and critical.”

To try to undercut the opposition from counties, the leadership group included a provision that would allow hard-pressed counties to get permission from a state commission to reduce welfare payments to able-bodied single adults if they could prove that they needed the money for law enforcement instead.

Acknowledging that many lawmakers were under intense pressure to pass a budget before the start of the fiscal year July 1 and thus avoid a repeat of last summer’s 63-day stalemate, Edelman said: “A bad budget that strips cities and counties of property tax revenue is worse than no budget at all.”

But Edelman and others opposed to the budget deal were waging an uphill battle. Whenever the governor and the leaders of each house in the Legislature agree on anything, it is almost sure to pass.

The only hope of blocking legislative ratification of the agreement seemed to be in rallying rank-and-file lawmakers to kill the plan because it included provisions hammered out in secret without the participation of legislators who are expert in various fields.

State Sen. Alfred E. Alquist (D-San Jose), chairman of the Senate Budget Committee, called the Legislature’s joint budget-writing committee into session Sunday afternoon and demanded that the governor appear to explain himself. Wilson refused.

“What I clearly resent is being handed a decision made behind closed doors of which I had no part,” Alquist said.

The strategy Sunday night was to put the package of bills to a vote first in the Assembly, where support for the plan appeared to be stronger. The leaders hoped that a favorable vote in the lower house would put pressure on the Senate to go along.

Senate Leader David A. Roberti (D-Van Nuys), who among the leadership group was least content with the agreement, said he doubted that his house would block it if the Assembly approved the plan.

“I have been a holdout in the past. It ain’t fun,” Roberti said. “I’ve never seen where it gets you anywhere.”

Times staff writer Carl Ingram contributed to this story.