NEWS ANALYSIS : Voters May View Wilson Victory as Another Loss

Sometimes it seems as if the more Pete Wilson wins, the more he loses.

The Republican governor took home another big budget trophy Tuesday, when he twisted arms to get legislative approval for a slimmed down $52.1-billion spending plan that included his proposal to shift property tax revenue away from local governments.

But this Wilson victory may soon go the way of his first two budget wins, both of which the governor and his aides thought might endear him to voters only to learn that the opposite was more the case.

As Wilson prepares to run for reelection next year, he may find that points credited to him by the legislative scorekeepers do not always translate into support from the public. Although the post-budget pundits have given Wilson high marks for achieving his major goals in each of his first three years in office, the more lasting impression he is leaving is that of a governor who raised taxes, squeezed the schools and, now, stuck it to local government.

Dan Schnur, Wilson’s chief spokesman, acknowledged that Wilson has and will continue to suffer political damage from his role in the center of the repeated budget battles, although he predicted that the long-term fallout will go Wilson’s way.

“That’s what happens when you are the most visible player in the process,” Schnur said. “These are unpleasant budgets with very difficult spending decisions involved, so everyone connected with their passage will pay some short-term political price.”

In 1991, Wilson’s first year in office, the governor played the statesman, joining with Democratic leaders to propose and win enactment of nearly $8 billion in state taxes.

Although Democratic lawmakers wanted every dollar of that new revenue and more, no sooner was the ink dry on the budget than Democrats began referring to the levies as “Wilson’s taxes.” The public held Wilson responsible and even repealed the most unpopular of the new taxes--one on candy and snack foods.

Once burned, Wilson stood firm against taxes in his second year, and after a 63-day stalemate with the Legislature got what he had demanded: a reduction in the long-term growth in school spending. But this victory also was Pyrrhic.

The fight cemented Wilson in the minds of many Californians as an enemy of the public schools--not exactly a political leg up for someone who desperately needs the help of suburban, middle-class swing voters to win reelection.

Now Wilson appears to have headed off a repeat of last year’s deadlock by piecing together a coalition with Democratic leaders for a budget that spreads the pain throughout the state and the voting population.

Once again, Assembly Speaker Willie Brown and Senate President Pro Tem David A. Roberti (D-Van Nuys) have been all too eager to give Wilson credit. Even as they were pounding on their members to vote for the compromise spending plan, the Democratic leaders were calling it “Wilson’s budget.” And no wonder.

For welfare mothers, few of whom could be counted as Wilson partisans, the budget includes a 2.7% cut in grants, on top of a 10% reduction they absorbed in Wilson’s first two years in office.

Poor and moderate-income tenants, another Democratic constituency but one with whom Wilson might have made inroads, lose the renters tax credit, worth $60 to individuals earning less than $20,500 and $120 to couples with incomes under $41,000.

For higher education, a pet program of the middle class, Wilson proposed deep cuts this year but reluctantly agreed to a budget that freezes spending at the current levels for the University of California and California State University systems. The final plan is expected to lead to fee increases of 22% at UC schools and 10% at CSU campuses--down significantly from Wilson’s original proposal but still steep enough, on top of previous increases, to rankle many a parent helping a child through school.

Then there is the local government piece of the puzzle.

Already being referred to as “Wilson’s property tax grab,” the cornerstone of the budget plan is a tax transfer that will shift $2.6 billion in property tax revenue from cities, counties and special districts to the schools.

The shift will allow the state to keep its commitments to funding public education, but at considerable cost to local government. Under the Wilson plan, the only way that voters can prevent dramatic reductions in their local services is to vote in November to make permanent the state’s temporary half-cent sales tax surcharge, which under the proposal would go to local public safety programs.

But even if the sales tax measure passes, local government services still will be squeezed. Law enforcement has been all but exempted from cuts, but everything else--from care for the mentally ill and homeless to parks and libraries--will bear the brunt of the shift. And every time constituents complain, they may well hear that none of this would have happened without “Pete Wilson’s property tax grab.”

Finally, and this could be the cruelest blow of all for Wilson, the budget may not get him out of the fiscal woods.

The spending plan foresees a thin $69-million reserve at the end of the 1994-95 fiscal year, the period for which Wilson and the Legislature will be budgeting at this time next year when the governor is in the midst of fighting for his reelection.

And the only way Wilson can count on even that tiny surplus is to assume that the state will force the public schools to repay $1.6 billion in loans that the state has saddled them with the past two years. The loans will be repaid by forcing the schools to go without cost-of-living increases that they would otherwise be entitled to under the state Constitution.

One of Wilson’s potential Democratic rivals for the governor’s job, state Treasurer Kathleen Brown, is sure to be critical of Wilson’s performance. She will point out that a nonpartisan commission she chairs believes that Wilson has overestimated potential tax receipts, underestimated expenditures and hidden a huge piece of the problem with the loans to the schools.

Brown, who has been criticized at times for staying aloof from the state’s policy battles, had a plan of her own this time. She wanted the state to extend the sales tax--rather than force local voters to do it. And she wanted to dedicate the money to paying off the state’s deficit and forgiving the school loans, which would have allowed the education budget to grow again when, and if, good times returned.

Brown’s plan was similar to a budget offered by Democratic Assemblyman John Vasconcellos of Santa Clara, which Wilson opposed despite a good deal of interest expressed in it by business leaders, law enforcement officials and a few Republican lawmakers.

If the economy rebounds smartly, then the budget, and Wilson, could be flush a year from now. He will run for a second term as the chief executive who stood firm when he had to and, when appropriate, compromised for the good of the state.

His handlers will try to turn the criticism on its head by contending that Wilson’s education loans kept cash in the schools’ hands when they needed it most and by pointing out that his local government plan included new protections for the budgets of law enforcement agencies.

But if the economy remains limp, those arguments may not carry much weight with voters as Wilson struggles with his fourth budget crisis. Even many Republican legislators believe that this budget will come back to haunt the governor.

Assemblyman Ross Johnson (R-Fullerton), former Assembly GOP leader, said he expects the state to be at least $2 billion in the hole: “When we’re back in the soup next year, (the Democratics are) going to say, ‘We gave the governor everything he wanted. It’s all his fault.’ ”