Budget Passed by Assembly Meets Stiff Fight in Senate : Finances: Opponents say the $52.1-billion plan sacrifices principles to meet a deadline. O.C. would fare better under it than officials had expected.

A state budget bill backed by Gov. Pete Wilson and the legislative leadership won approval in the Assembly but met opposition in the Senate on Monday night, where rank-and-file members complained that the $52.1-billion spending plan sacrificed principles to meet a deadline.

A string of critics, all Democrats, denounced the plan before a tentative vote left the budget 12 votes shy of the 27 needed for passage. Eight Democrats and seven Republicans supported the bill on the first tally before the Senate broke for dinner--and a full-scale lobbying campaign by Wilson and leading lawmakers.

It was unclear from the early vote how deeply in trouble the budget bill was because it is a tradition here--evidenced 24 hours earlier in the Assembly--for lawmakers to vote against the budget in hopes that the governor or legislative leaders will make concessions to their interests.

The spending plan makes deep cuts in welfare, bolsters prisons and protects public school funding by shifting $2.6 billion in local government property tax revenues to schools. The plan hits Los Angeles County particularly hard, and at day’s end, Los Angeles lawmakers were working on an urban aid package to assist the city and county.

Orange County would fare better under the proposed budget than officials had expected, but the county remains on a collision course with $60 million in funding cuts and new costs.

The pressure in the Senate to vote for the budget, any budget, was especially intense Monday because the Assembly approved the plan in a rush of early morning compromises after an all-night session ending at 4:54 a.m. Monday.

Many lawmakers feared that rejection of the bill in the Legislature’s upper house could trigger another prolonged stalemate similar to last summer’s 63-day deadlock.

“We have our duty,” said Senate President Pro Tem David A. Roberti (D-Van Nuys). “Our duty is to (get) the state of California moving again. Our duty is to pass a budget.”

But some members said they were fed up with the focus on the Legislature’s constitutional deadline for passing a budget--missed a week ago--and the July 1 start of the fiscal year.

“I won’t have a budget shoved down my throat just to meet a deadline,” said Sen. Diane Watson, a Los Angeles Democrat. She said the plan cut too deeply into services for the poor.

Sen. Tom Hayden (D-Santa Monica) said the leadership, in its haste to meet the deadline, had ignored the damage the budget would do to higher education and had failed to consider eliminating business tax breaks to raise more money for the state’s treasury.

“My concept of duty says you fight for your beliefs, and I don’t remember that (fight) having begun,” Hayden said.

But Roberti told the members that the public holds the Legislature in low regard because it cannot follow the law and pass a budget on time.

“Let’s get a life here,” he said repeatedly.

The budget was crafted behind closed doors by Wilson, Roberti, Senate Republican Leader Ken Maddy of Fresno and the Assembly’s Democratic and Republican leaders.

The Assembly approved it early Monday by a bare two-thirds vote, 54-24, after Assembly Speaker Willie Brown (D-San Francisco) raised the possibility that Democratic holdouts risked losing their leadership positions as committee chairs.

Brown told lawmakers that they needed to approve the budget because it was not going to get any better. Even so, he acknowledged that the budget was going to be painful and he made an effort to distance himself from the details.

“It is Pete Wilson’s budget,” a fatigued Brown said as dawn neared. “There is very little in there the Democrats ought to be supporting.”

Yet the Republican Wilson was able to muster only eight of 31 GOP votes in the Assembly, even after a night of intense lobbying.

In the Senate, Republicans and Democrats met privately in party caucuses for most of the afternoon Monday. As he did in the Assembly, Wilson argued for his budget in meetings with Senate Republicans.

“This is the best package that we have available to us,” Maddy said. “It can only get worse.”

Perhaps the most contentious part of the plan would shift $2.6 billion in property taxes from local governments and transfer the money to schools. To make up part of that amount, the budget plan would extend the extra half-cent sales tax for another six months, with the proceeds going to local government.

The plan would ask voters to decide in November whether to make the sales tax hike permanent.

Under the spending blueprint, Orange County would see $8.4 million shifted from county government to pay for education. Another $29 million would be stripped from the county’s special districts.

The county would also have to absorb an anticipated $30 million in extra costs to finance law enforcement, which Wilson made a priority in this year’s budget debate.

Those fiscal blows would be partially blunted if the sales tax is extended. In addition, the county would receive about $7 million from a one-time shift of vehicle license fees from state to county coffers.

If the budget survives intact, it would mark a victory for law enforcement in general and Orange County Sheriff Brad Gates in particular. Gates and several other sheriffs from around the state have haunted the Capitol in recent weeks, lobbying the governor and legislators for guarantees that law enforcement would receive top priority for revenue from the half-cent sales tax.

Under the spending plan, law officers, prosecutors, jails and firefighters in the county and its cities would receive the same funding as last year plus an extra 3% for inflation. Previously, the Sheriff’s Department was targeted for a 6% cut, which prompted Gates to predict that he would be forced to lay off 300 employees, close a jail and release 2,500 prisoners.

The decision to fund law enforcement will mean “we’re going to have to come back and erase the chalkboard and start all over again on how we distribute these funds,” Supervisor Gaddi H. Vasquez said.

Vasquez’s colleagues on the Board of Supervisors, meanwhile, continued to complain about the the budget, in particular the shift of property taxes to education.

“The whole philosophy of taking property tax away from local government is not only unprecedented, it’s unconscionable,” Supervisor Harriett M. Wieder said.

The budget also eases cuts that cities in Orange County will have to absorb. While several will have their funding slashed by more than $1 million, the cuts are about half what was originally expected under Wilson’s preliminary budget.

Based on figures released by the Office of the Legislative Analyst, the hardest hit will be Huntington Beach at $1.9 million, Santa Ana at $1.8 million and Anaheim at $1 million.

“We had planned for a loss of $2.9 million, so this news is better than what we had expected,” said David M. Morgan, Anaheim’s assistant city manager. “We’re still very concerned about other things the state’s looking at cutting that will have a negative impact on the city. Sacramento continues to be a very unstable situation.”

The Assembly needed three votes before Brown and Minority Leader Jim Brulte (R-Rancho Cucamonga) could marshal the required 54 votes.

Brulte said he “wouldn’t read much into” GOP lawmakers’ refusal to embrace the governor’s spending plan. He said the vote reflected a bipartisanship missing from recent budget fights.

“It should signal to all California that the legislators of both parties are willing to compromise to get a budget on time,” Brulte said.

Brown exerted his influence to muster all but one Democrat to support the budget. “I’m shocked that only eight Republicans stepped forward,” Brown said.

Assemblyman John Vasconcellos (D-Santa Clara) was the sole Democrat to vote against the plan. Vasconcellos called the proposal a “stupid and obnoxious” budget that gave too much to police and prisons and not enough to California’s poor. He also said the spending plan placed before the Legislature by the leadership and Wilson failed to solve California’s $2.9-billion deficit.

Vasconcellos, co-chairman of the Assembly-Senate joint committee on the budget, had been working on a legislative version of the budget when the so-called Big Five--Wilson and the Democratic and Republican leaders of the Legislature--took over negotiations.

After hours of meetings with lawmakers and debate on the floor of the lower house, Brown put the budget to a vote for the first time about 11:30 Sunday night. It failed by a vote of 40 to 31, and the arm-twisting was turned up a notch.

Much of the pressure was focused on Los Angeles lawmakers because for most of the night, key members of the Los Angeles delegation held out for a better deal. The delegation was responding to Los Angeles County officials, led by Board of Supervisors Chairman Ed Edelman, who came to the Capitol to kill the deal.

Under the spending plan, Los Angeles County loses $273 million in local property tax revenue--more than half the combined $540 million that the 58 counties will lose. The impact is so large primarily because the county had benefited disproportionately under the bailout of local governments organized in the wake of Proposition 13 property tax cuts.

Finally, early in the morning, Los Angeles County officials and several Los Angeles lawmakers met privately with Brown in his office. Although there was no yelling or table thumping, “the words were coming fast” between Edelman and Brown, said Dist. Atty. Gil Garcetti. The meeting lasted for more than half an hour and broke up at 2:15 a.m.

During the meeting, there was talk of allowing the county to impose a tax on the gross receipts of businesses. But that idea was put on hold because cities have imposed such a tax.

Assemblyman Terry B. Friedman (D-Brentwood) suggested allowing cities and counties to receive some proceeds of a state tax imposed on banks doing business in California. The so-called bank-in-lieu tax could bring up to $180 million to counties and cities statewide, with much of that going to financial centers such as Los Angeles and San Francisco.

Brown agreed to allow the idea to go to the floor for a vote.

“We needed to find something quickly that would have support,” Friedman said. “I’m not about to subject the people of California to another 64-day struggle. We had an obligation to come up with alternatives.”

The meeting broke up, and Brown put the budget to a vote again at 2:20 a.m. Again, the budget failed, this time 39 to 37.

Sounding impatient and angry, Brown recessed the floor session and ordered his Democrats into a private caucus, saying: “Where are my committee chairs?”

The implication was clear: He was calling in favors from Democrats he had rewarded with powerful chairmanships.

“He was expecting the chairmen of the committees to respond,” Assemblyman Richard Polanco (D-Los Angeles) said. “He was saying, ‘This is a critical vote.’ ”

The Los Angeles lawmakers agreed to relent, but only after the bill providing the urban bailout moved to the floor.

The final yes vote was cast by freshman Assemblywoman Debra Bowen (D-Marina del Rey). In the wee hours, she was the focus of intense lobbying by other members, including Assemblyman Richard Katz (D-Sylmar).

At a Los Angeles news conference Monday afternoon, Supervisors Chairman Edelman said: “This is a disaster for Los Angeles County. . . . This is not the right time or the right way to cut local government’s sources of revenue.”

The Los Angeles Board of Supervisors is scheduled to begin deliberations on the proposed $13-billion county budget today.

County officials said the funding cuts would force them to close at least one hospital, eliminate mental health services to at least 30,000 patients, close four jails and 23 parks, and lay off 9,500 employees.

Edelman said the legislators caved in to pressure to get the budget done, rather than face more embarrassing delays.

Supervisor Mike Antonovich said the Assembly chose “to take the easy way out, with a power grab, a confiscation of the property tax” that had traditionally belonged to the counties.

But in the Senate, Roberti warned Los Angeles-area lawmakers that they risked getting a worse deal for their county if they voted against the budget and forced it back into a two-house conference committee. He noted that legislators from rural areas complained that the budget favored urban California at their expense.

Times staff writers Carl Ingram, Frederick Muir and Mark Landsbaum and correspondent Mimi Ko contributed to this report.